Key Facts
- New survey reveals significant shift in relationship between
younger generations and traditional financial institutions as trust
in financial advice from social media grows.
- According to the survey, social media has become the primary
source of financial advice for younger generations, which can
promote unrealistic comparisons and financial insecurity.
FIS® (NYSE: FIS), a global leader in financial technology, today
announced the findings of a comprehensive U.S. consumer research
study examining the shifting landscape of generational
relationships with financial institutions. The study highlights the
increasing challenges traditional banks face in competing to be the
voice of authority on personal finances amid rapid technological
advancements and economic uncertainty.
Hashim Toussaint, GM of Digital and Open Banking at FIS,
commented on the findings, stating, "This research highlights a
pivotal moment for the financial services industry. As younger
generations increasingly turn to digital platforms for financial
advice, traditional banks must evolve to meet their changing
expectations. By offering personalized, data-driven solutions, we
can bridge the trust gap and support consumers in making informed
financial decisions, bringing greater harmony to their financial
lives."
Social media takes over as the main driver of financial
advice for younger generations
The research shows that social media has become the primary
source of financial advice for younger generations. For instance,
40% of Gen Z and 36% of Millennials surveyed report that they are
learning about finance from social media platforms, whereas less
than 25% of this cohort are being educated by their financial
institution.
Yet, dependence on social media has its drawbacks. Financial
advice on these platforms tends to be fragmented and can result in
unrealistic comparisons and disjointed financial decisions, which
can heighten financial anxiety among consumers. Just over half of
Americans surveyed feel they are not making or saving enough money
compared to others they see on social media, with two-thirds of Gen
Z feeling this way.
Hashim Toussaint of FIS notes, "As reliance on social media for
financial guidance grows, a profound challenge for banks emerges as
they compete with the immediate gratification offered by
influencers. Banks must lean into their role as trusted financial
advisors, unlocking the financial wisdom for customers to put their
money to work, so they can take a step back from the daily
doomscrolling and have greater confidence in their ability to
achieve their future goals.”
Rising financial anxiety across generations due to fragmented
advice and economic uncertainty
Across all generations, financial anxiety is on the rise,
exacerbated by the constant access to fragmented financial advice
on social media. The study found that 68% of surveyed Gen Z and
Millennials, and 63% of surveyed Gen X, strongly agree that money
is a major emotional stressor. Additionally, nearly half (47%) of
the Gen Z and Millennials surveyed check their personal
checking/savings accounts daily compared to just 30% of Boomers
surveyed.
A particularly striking finding from the study is that 41% of
surveyed Americans believe they could only invest money if they
experienced a financial windfall like winning the lottery, and 55%
are worried they will never be able to retire. This pervasive
financial anxiety suggests that many US consumers may feel their
current financial strategies are insufficient for achieving
long-term goals like homeownership or substantial investment.
Two-thirds of Gen Z consumers surveyed do not feel they make
enough money compared to their peers, and 59% of Gen Z respondents
think about their money on a daily basis compared to only 36% of
Boomer respondents. As consumers struggle to keep their finances in
harmony, this anxiety may intensify, leading to behaviors such as
doomscrolling, which further deepens their financial fears and
uncertainties.
Consumers are vaulting their funds at rest instead of putting
their money to work
The study reveals that younger generations are primarily keeping
their money in checking accounts and digital wallets. Specifically,
33% of Gen Z and 42% of Millennials reporting holding their funds
in checking accounts, while digital wallets are reportedly used by
18% of Gen Z and 11% of Millennials. Additionally, many in younger
generations are keeping money in accounts that are not FDIC
insured, which can pose significant risks to their financial
security.
The trend of keeping most funds in checking accounts suggests
that younger generations are not maximizing growth and optimization
opportunities. However, Gen Z consumers have reported opening more
financial accounts in the past year than any other generation
surveyed, which suggests that while they are putting their money at
work by investing, they are actively engaging with their
finances.
Banks can bridge generational trust gap by keeping pace with
new entrants and delivering exceptional customer
experiences
Amid these challenges lies a significant opportunity for banks
to drive exceptional customer experiences and earn the trust of
younger, tech-savvy consumers. Over 80% of Americans surveyed
remain loyal to their long-time financial institutions, however,
just over half would consider switching for a better offer.
Notably, Millennials switched banks five times more than Boomers in
the past year.
To attract younger customers, banks should create innovative
tools and services that empower consumers to stay organized, inform
them about their choices, and support them in achieving their
financial goals. Offering tailored and easily accessible financial
solutions will help attract and retain the next generation of
customers.
Methodology
FIS’ survey was conducted by Savanta in July 2024. The research
explores the attitudes and behaviors of US Consumers across
financial wisdom, data privacy and perception and the impact of
social media on how different generations view their financial
wellbeing, as well as the opportunity for banks to evolve in these
areas.
The US data is based on a representative sample of 2,992 adult
consumers across the US, spanning Generation Z (18-27), Millennials
(28-43), Generation X (44-59) and Baby Boomers (60+).
About FIS
FIS is a financial technology company providing solutions to
financial institutions, businesses, and developers. We unlock
financial technology to the world across the money lifecycle
underpinning the world’s financial system. Our people are dedicated
to advancing the way the world pays, banks and invests, by helping
our clients to confidently run, grow, and protect their businesses.
Our expertise comes from decades of experience helping financial
institutions and businesses of all sizes adapt to meet the needs of
their customers by harnessing where reliability meets innovation in
financial technology. Headquartered in Jacksonville, Florida, FIS
is a member of the Fortune 500® and the Standard & Poor’s 500®
Index. To learn more, visit FISglobal.com. Follow FIS on LinkedIn,
Facebook and X.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241016941016/en/
Kim Snider, 904.438.6278 Senior Vice President FIS Global
Marketing and Communications kim.snider@fisglobal.com
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