Mobile Payments, Mobile Banking Taking on the Gen Z Market
Disposable income and need to shop are strongest among the young, who commonly have fewer family obligations and more things they need. Just ask anyone who moved out of Mom and Dad’s house lately and now needs their own plates and such. This is prompting new word that banks and other mobile payments operations are now specifically targeting Generation Z with offers and even some education about the new world they’re entering.
The picture isn’t rosy for the growing consumer body of Gen Z; many banks and credit operations have left the Gen Z consumer out in the cold for loans and the like. This, in turn, has led several financial technology (fintech) operations to step in and deliver not only access to services but also financial education tools.
The FDIC rings a note of assent here, noting that 10 percent of households involving 15 to 24 year olds are currently unbanked in 2017. That’s down from 2015’s figures of 13 percent, which was down in turn from 2013’s 15.7 percent. However, the percentage of underbanked in that range is fairly high at 29.3 percent in 2017, down fractionally from the 29.4 percent seen in 2015. At that rate, there’s still quite a number of underbanked individuals in that age bracket, showing a clear opportunity.
Here, “unbanked” means no connection to a bank at all, not even checking or savings, and “underbanked” means a checking and / or savings account, but no access to loans or the like.
Take these figures, and what becomes clear is that the biggest consumer segment of our economy has very little meaningful access to loans and credit, a point which means that banks are likely not getting all the revenue they could. This is likely a function of the bank’s standard position of risk-aversion; Gen Z is commonly young, and the young have long had difficulty accessing credit without a co-signer of some kind in play.
At any rate, Gen Z represents one big potential market. With fintech applications moving in where banks fear to tread, the chances of fintech taking a larger share of the Gen Z financial market than banks do are better than some may think.