Independent Banker - January 2022 - 50

also well educated: 57% go to college
at 18-21 years old, compared with
52% of millennials, according to the
Pew Research Center. Gen Zers are
developing a reputation for being
pragmatic and financially savvy.
It's a trait they come by honestly.
Primarily raised by skeptical Gen
Xers, Gen Z grew up during the
Great Recession and its aftermath.
While they were too young to
understand the financial crisis, they
still experienced fear and anxiety as
families struggled. They saw people-
possibly their parents-lose their
homes. They witnessed how college
debt weighed on millennials, making
it difficult to launch financially
independent lives and to buy homes.
Then came the COVID-19
pandemic, which hit Gen Z
particularly hard. They were the
most likely to lose their jobs-
typically entry level or in the service
industry-or have their pay or hours
reduced. Others ran into the " last
hired, first fired " dynamic. A third
were just starting to create a sense of financial
independence and self-reliance. "
* Saving for a rainy day *
But Gen Z is not easily defeated. The silver lining
is that they have learned from these experiences
and come out more resourceful. They tend to
value individual expression and experiences over
acquisition, and stability over risk.
They're also big savers. Of working Gen Zers,
70% are already saving for retirement, and they
are doing it earlier than any other generation did
(age 19 versus age 25 for millennials), according
to Transamerica. More than three quarters
(78%) say retirement benefits are a major factor
when considering a job offer.
" [The pandemic has] been a real moment
of financial reflection. They were just
starting to create a sense of financial
independence and self-reliance. "
Jason Dorsey, Center for Generational Kinetics
had to reduce their spending and
dip into their savings accounts, and
14% accumulated new credit card
debt, according to a survey by the
Transamerica Center for Retirement
Studies. Many had to move in with
their parents.
" It's been a real moment of
financial reflection, " says Jason
Dorsey, president and cofounder of
the Center for Generational Kinetics
(CGK) and co-author with Denise
Villa of Zconomy: How Gen Z Will
Change the Future of Business-
and What to Do About It. " They
50 Q ICBA Independent Banker Q January 2022
They also have the wisdom not to go it alone.
Older Gen Zers, those aged 18 to 24, have been
more likely to seek out financial advice than
millennials since the pandemic began, according
to CGK. Common sources of information include
parents (27%), friends (25%), YouTube (25%)
or social media (21%), but they've also turned
to banks. Fifteen percent reached out to a bank
or credit union associate for help during the
pandemic, showing there is significant demand
for financial education and advice. This is
especially true for men,
who are nearly twice as
likely to turn to financial
institutions as are women.
* Become part of
their world *
This is welcome news for
community banks. Just
because Gen Z are digital
natives who have never
known a world without
smartphones doesn't mean they don't desire
connection. They expect the companies they
do business with to understand who they are
and what they value. Nearly a third of Gen Zers
say they feel more loyal to brands that support
causes they agree with, compared with just a
quarter of millennials, according to CGK.
The key is to meet them where they are, and it
doesn't hurt to entertain them along the way. So
where are they? Mostly, online-and we're not
talking about Facebook.
One important thing to note is that influencers
play an outsized role in the life of Gen Zers,
including in the financial realm. This means
community banks should create meaningful
Illustration by CACTUS Creative Studio / Stocksy
Independent Banker - January 2022

Table of Contents for the Digital Edition of Independent Banker - January 2022
