How Gen Z is shaping the future of banking and commerce

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The world is changing incredibly fast. Our ability to quickly adapt to new trends, technologies and generational shifts is becoming increasingly crucial for us to remain relevant and ahead of the curve in this hyper-competitive ecosystem.

In this context, a new generation of influencers is emerging with great force. Today we are facing a unique social phenomenon: the “Gen Zers”, the first generation of truly digital natives, who are redefining the world of banking and finance in a forceful way, gaining prominence as a key segment of consumers and becoming the new influencers of tomorrow.

As this group continues to expand, enter the workforce and gain more purchasing power, their impact on culture, technology and retail consumption will be profound. With this in mind, and in order to help our banking clients effectively connect with this generation, at Visa we want to share some important insights and behaviors, which based on global trends, can help financial institutions design specific strategies and product portfolios that help them cleverly attract and retain these young people.

Hyper-tech generation. What really makes this next generation of consumers unique is that these digital natives (born in the mid-1990s to 2000) have never had a life without the internet. From a young age, they have been exposed to technology, social media, and mobile devices. In fact, nearly 99% of Gen Z owns a smartphone or has access to one. [1] And as they have grown up with technological advancements, they expect brands to “continually evolve” and “embrace new technologies.”

Being constantly connected is the norm. In line with their digital savvy, we are talking about a hyper-connected, quick-witted and resourceful group; a generation that needs to be reached through multiple channels with clear, short and powerful messages. Gen Zers take 8 seconds to decide if content is worth their time, use up to 5 devices at once and check social media about 100 times a day [2].

The age of social media. This group of young people are also shaping the new era of social media and social commerce. In fact, Gen Z has the highest engagement with social media than any other generation: 99% say they actively used social media or chat apps in the past 6 months. [3] Additionally, 85% use different social media channels to learn about products [4]. Snapchat, TikTok, Instagram, and Facebook are their preferred social platforms.

Connecting through gaming and the Metaverse. Gaming has also become the primary form of digital entertainment for Gen Z and is becoming an important part of their social lives and everyday identity. Additionally how to get telegram profile link Metaverse is also creating new opportunities to engage with this generation. In fact, according to research we conducted in the US, UK, China, and Japan, 70% of Gen Z gamers expect to have a good time in the virtual world of gaming without actually playing [5].

Digital banking. When it comes to banking and payments, Gen Zers conduct most of their banking and financial transactions online and clearly prefer digital and mobile channels. In fact, a recent study by Logica Research [6] revealed that “more than 6 in 10 Gen Zers said mobile devices were their most popular method for digital purchases.”

Just as importantly, Gen Z is increasingly using debit cards and may transition more quickly to credit cards and alternative options such as P2P and Buy Now Pay Later (BNPL) platforms [7] . They are also embracing new digital assets such as cryptocurrencies, with 59% of Gen Z believing they could become rich by investing in cryptocurrencies. [8]

There is no doubt that Gen Zers are emerging as the most educated, digitally savvy and socially focused generation in the world; a group of young people that now makes up 26% of the world’s population. [9] As such, all participants in the payments ecosystem must rise to the challenge of connecting with these young people through innovative digital banking experiences to unleash greater business growth and capture the loyalty of the fastest-growing consumer group in the world; the young people who are redefining the future of commerce.