Gen Z take the wheel: What’s driving the next generation of consumers?

What is driving the next generation of consumers? 

Born between 1997 and 2012, Gen Z makes up 32% of the global population and is set to become the most influential generation since the baby boomers. Unlike previous generations, they have grown up with the internet and social media, which has profoundly influenced their behaviour and interactions with businesses. Economic instability and climate change have also significantly shaped their values and behaviours. Let’s explore how these factors impact their actions.

Economic instability

Although economic instability affects everyone, Gen Z is particularly worried about money. Research indicates that Gen Z has significantly less buying power than previous generations, with wages not keeping pace with the rising cost of living. Nearly half report spending their entire monthly income on living costs, with some moving back home due to increasing rent and energy bills and the prospect of homeownership seems impossible. This financial strain influences their spending habits and life choices, making affordability and flexibility crucial. Many are seeking tools and advice to help them manage their money more effectively.

Rapid technological change 

Growing up in the digital age, Gen Z have used the internet, social media, and mobile phones from a young age. They are tech-savvy and hyper-connected, and this constant connectivity has shaped their communication styles. They are more comfortable with virtual interactions and digital platforms, and are more likely to use smartphones for banking services. This generation also demands seamless digital customer experiences with a preference for brands that offer personalised and engaging interactions.  According to research, 64% of Gen Z respondents seek customised banking experiences, with nearly half willing to switch banks for a better user experience.

Climate change

This generation has grown up in a world where climate change is a prominent issue in media, scientific research, political discussions, and on social media. As a result, Gen Z are much more concerned about climate change than previous generations. They prioritise sustainability in their daily lives and purchasing decisions, with 6 in 10 willing to pay more for sustainable products and services. They seek transparency and accountability, expecting companies to take meaningful action towards reducing their carbon footprint. 70% of Gen Zers also want their banks to support them in their sustainability journey and help them understand the environmental impact of their purchasing decisions. In fact, over 60% are willing to switch banks if their provider falls short on sustainability. 

How financial institutions can engage Gen Z

To engage future generations, financial institutions should focus on creating personalised digital experiences that cater to Gen Z's needs. They should help customers understand the environmental impact of their spending and provide tools to improve both carbon and financial literacy. This will enable Gen Z to save money and reduce carbon emissions, and it will help banks build loyalty and trust with the younger generation.

‍Discover how Cogo's innovative carbon management solutions can help you engage Gen Z and lead the charge.