The impact of financial services democratisation on Gen Z

The democratisation of financial services, fuelled by new providers and services such as digital banks and FinTech platforms is reshaping Gen Z’s relationship with money, saving and investing.

The rise of digital banking means Gen Z understand their finances better

Gen Z in Netherlands, Germany and France are embracing digital banking, with 40% using a digital bank as their main banking provider and 25% using one alongside traditional banks.

UX is the main contributor to this. When asked about their top reasons for using digital banks, Gen Z said they are attracted by the banks being user-friendly (34%), enabling seamless sending and receiving of money (31%) and saving time and effort by avoiding the need to go into a branch (25%).

Additionally, for Gen Z in France, digital banks are also removing barriers; 27% consider ease of approval a key benefit.  

All of this is leading to strong outcomes in their broader life. Gen Z reported that using digital banking services had enabled them to save more money (32%), understand their finances better (30%) and have more time (24%).  

Not without limitations

Despite its many perceived benefits, Gen Z are not blind to potential limitations of digital banking services. Their primary concerns relate to security of their money (28%) and access to human support in the digital-led relationship (not being able to speak to a human was a concern for 27% and not being able to go into a branded 23%).    These are potential acquisition and usage barriers for digital providers to navigate with this younger audience.

Investing via FinTech makes Gen Z feel part of a community

FinTech Investing was once only accessible to a certain type of person. Now it’s possible to invest via FinTech platforms with as little as $1. The first wave of Gen Z in France, Netherlands and Germany have also started to take advantage of these FinTech platforms. 14% of Gen Z across markets are using a crypto trading platform whilst 9% are using a robo investing platform.  

Consistent with the trend for digital banks, these Gen Z  FinTech users are compelled by the user-friendliness of the platforms (29% for cryptocurrency and 19% for robo investing), as well as having high returns (19% and 17%) and ease of approval (15% and 19%). 

These product benefits translated into striking outcomes for Gen Z FinTech users. When asked what impact the FinTech platforms had on their behaviour, users most commonly said it made them more knowledgeable (22% and 24%) and made them “feel a part of a community of investors like me” (19% and 23%). 

There is a healthy level of interest in the platforms among the rest of the Gen Z, with about one in three open to using the platforms in the future (39% for cryptocurrency platforms and 33% for robo investing platforms).