I was reading my journal recently and an entry from seven years ago with my then-five-year-old son stood out. Nick: “Mom, why do babies cry?” Me: “It’s their way of letting you know they need something.” Nick: “It’s annoying. Too bad they can’t send a text message.”
It struck me this perfectly captures (and crystallizes) haptic memory and the notion of #GenZDisruption that I've been writing about in earnest since January. Nick and his peers have grown up with the Smartphone, which means -- you’ve heard me say before -- they’ve had more computing power in the palm of their hand than the original IBM mainframe since they were babies. In fundamental ways they believe text messaging is a more effective way to communicate than crying (so to speak), which makes them inherently demanding technology consumers and, in that way, the ultimate disruptors.
The Center for Generational Kinetics, based here in Austin, is doing some important original research on Gen Z. One of their main research topics has been how Gen Z relates to money and how they differ from other generational cohorts. They are very different than Millennials and Generation X and behave more like Boomers. Fully 52% believe that debt should be limited or avoided completely. Millennials, on the other hand, believe that debt -- particularly college debt -- is unavoidable.
Gen Z is also comfortable going cashless as fully 48% currently have a payment app on their phone. In addition, only 46% of Gen Z have even been inside a bank within the last 30 days, compared to 70% of Millennials. This may be a function of their age (still young), but I think it is more about their relationship to money. Will Gen Z see the need for checking and savings accounts or can PayPal, Apple Pay, and Venmo meet their demands? Will they see the need for consumer loans (cars) or will they turn to Uber for transportation given their aversion to debt and lack of interest in obtaining a drivers license? Will they want traditional wealth management services or will investment advice from AI suffice? These are important questions to both ask and answer given there are 61mm of them -- roughly one-third of the population -- and they are coming-of-age fast.
I don’t for a minute believe it means Gen Z won’t want/need financial advice. I simply think they’ll engage service providers in different ways. Maybe they want a “coach” rather than “advisor”; they'll expect to do financial planning via VR/AR; they’ll want to meet for coffee rather than at a stuffy bank branch, the appointment of which was made by Alexa. The idea is now is the time to ensure you have mobile apps and a digital ecosystem that can accommodate them because this is just for starters.
They've broken enough glass already to prove they won’t feel obligated to do business with their parent’s bank just because. With unprecedented generational turnover upon us -- $30 trillion in assets changing hands in the next 10 years -- best to make sure your technology offering is sound, and that your brand is both trustworthy (remember, they're socially conscious) and cool (they're also brand conscious) if you want to keep Gen Z's piece of the pie. Jamie Dimon, for one, is leaving nothing to chance – he is on record as saying he’s turning JPMorgan Chase into Amazon before Amazon becomes a bank.