By Yashoraj Tyagi, Chief Business Officer & Chief Technology Officer, CASHe
As the world matures into a new era of technological dominance, the generation that came of age with technology finds itself caught between the benefits of perils of the current crop of software technologies. Generation Z, also known colloquially as Zoomers, are distinct from their millennial forebears in the fact that they have a scant recollection of a time without the internet. Naturally, computers have been integral to their development and have exerted an enormous influence on their beliefs and outlook, often with polarising effects.
As access to information becomes more democratic, there is a greater likelihood for individuals to be caught in a flurry of information where it becomes difficult to vet information for their quality. This can often result in some unpopular ideas making their way into the collective consciousness, to the point of popularising bad financial habits that could threaten the financial prospects of people who give in to these trends.
Personal finance as a genre of content has gained a lot of traction in recent years. This is in no small part due to the sheer number of market volatilities that zoomers have witnessed in their short lives. From the technology bubble of 2001 to the global financial crisis of 2008 and more recently the near-apocalyptic COVID-19 pandemic, Zoomers are the first since the silent generation to be seeing these many shocks to the world economy even before entering the workforce.
Needless to say, it is no surprise that they’ve allowed their inherent sense of money management to be privy to external influences. The most recent iteration of Deloitte’s annual survey of the GenZ and Millennial cohort revealed some startling facts: nearly half of them live from paycheck to paycheck and almost a third of them do not feel financially secure. While there are numerous reasons to explain why this may be the case, a large part of it may have to do with the shoddy financial habits that they may have inherited from their parents, while not having enjoyed the benefits of the long years of general prosperity and stability that their parents did.
Zoomers are racked with a sense of déjà vu when it comes to personal finance. Every topic, right from managing expenses to investing and even saving for retirement seem to be familiar with them, yet they fall short when it comes to actually implementing them in the right fashion. Much of this confusion boils down to decision stress that comes from not knowing which source to trust. In the absence of solid wealth management services, they have turned to YouTube channels and Social media influencers to learn the aspects of personal finance, without much success.
Historically, wealth and asset management services were reserved for the elite as existing models relied on managing vast sums of wealth to generate sufficient profits for their managers. That model is rapidly changing. The advent of sophisticated software-based delivery models means that wealth managers now have the unique advantage of serving up a common model of wealth management for a vast number of clients.
Given how digitally savvy zoomers are, they even have the option of architecting a self-service model that would require less micromanagement on their part and leave the decisions to the clients themselves, something which would be difficult to do with the previous generation.
Using the smartphone as a vehicle, wealth management services can go beyond asset management and venture into other value-added services that zoomers are in dire need of. Investment education, clarity into life insurance, and retirement planning are all areas that zoomers have professed to struggle with.
Ultimately, zoomers and millennials are both tired of having their deep-seated financial insecurities being used against them for the benefit of encouraging today’s rampant consumer culture. They crave the kind of stability their forebears had experienced and have demonstrated the kind of discipline it takes to achieve it. This is perhaps the biggest hook for wealth management services today: the prospect of fulfilling the promise of stability.
Being the ‘idealistic pragmatists’ they are, zoomers are no different from any other generational cohort in the sense of wanting to undertake meaningful work, while also ensuring that their finances are in check. While many are fine with forgoing their purpose for pay, it is not a situation that they want to continue for the rest of their lives. Differentiated wealth management services that are built on trust, empathy, and a genuine desire to build an equitable wealth pool are poised to be a huge hit among this crowd.
Those that recognise this need and build for these ubiquitous problems stand a chance of becoming the most aspirational financial company in recent times. Finance has, for far too long, been seen as an elitist service that caters to a very small section of the global populace. Those who dare to break this hold and build an open architecture for wealth building will be the financial pioneers of a new generation.
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