The financial sector stands on the brink of a major transformation, catalyzed by the emergence of Generation Z, the digital natives born between 1997 and 2012. This generation, set to represent 30% of the global workforce by 2030 according to Deloitte, is redefining expectations for financial institutions and emerging as a driving force for financial innovation (1). Their unique approach to financial management is creating both unprecedented challenges and opportunities for the financial sector.
At Odonatech, we've designed LiLa, the first AI-powered financial advisor, to offer tailored solutions for everyone, including meeting the expectations of a demanding and hyper-connected audience like Generation Z.
📱The Potential of Generation Z: A Digitally-Savvy and Demanding Audience
This generation, born into a digital world, brings a fresh and innovative perspective to the financial sector. As anthropologist Elisabeth Soulié points out: "There's a discontinuity in this generation, a constant and ongoing reconfiguration [...] It's a generation that doesn't separate the physical from the digital." This observation highlights Gen Z's fluid and tech-savvy nature, particularly in their relationship with technology. As digital natives, Gen Z is comfortable with technology and seeks seamless, omnichannel experiences.
Indeed, Generation Z stands out for its early adoption of investing and pursuit of financial independence. Over half of this generation is already investing, with 26% putting their money into the stock market (1). They show increased interest in emerging technologies like cryptocurrencies and NFTs, and are willing to take significant risks for innovative and sustainable investment opportunities (2).
💸 The Challenges Financial Institutions Face with Generation Z
Despite their interest in finance, Generation Z shows the lowest confidence in financial knowledge among current generations (1). This ultra-connected generation aspires to a fully digitalized and personalized banking experience, while placing increasing importance on the environmental impact of their financial choices (2). According to an Oliver Wyman study, 30% of 18-26 year-olds are considering switching banks soon, compared to only 17% for other generations. This volatility highlights the challenges traditional financial institutions face.
Financial institutions must therefore reinvent themselves to remain relevant and attractive to this demanding and fickle clientele. Generation Z, seeking a fully digitalized banking experience, accessible 24/7 with instant personalized financial advice, represents a major challenge for financial institutions to overcome.
⚡️ Seamless and Instant Customer Experience
Gen Z's expectations for financial services are high. This hyper-connected generation demands a fully digitalized banking experience, accessible 24/7, with instant personalized financial advice. To meet these needs, it's essential to provide financial tools that offer not only convenience but also increased personalization and responsiveness. LiLa, our AI financial advisor, was developed with these requirements in mind.
🤖 LiLa: How AI is Redefining Financial Advice
In the face of this revolution, LiLa is at the cutting edge of innovation with:
Advanced personalization via AI for tailored advice, allowing users to receive financial recommendations adapted to their habits and goals.
24/7 availability through an intuitive mobile interface (WhatsApp or any other white-label API), offering unparalleled accessibility and convenience for an always-on-the-go generation.
Integrated financial education to develop users' knowledge, enabling them to better understand financial markets and make informed decisions.
Holistic approach valuing ethics and sustainability, incorporating ethical considerations into financial recommendations and promoting sustainable investment choices.
At Odonatech, we take Generation Z's concerns about transparency and social responsibility seriously. That's why LiLa incorporates safeguards for data protection and promotes sustainable investment choices. Generative AI is being rapidly adopted by Generation Z, with 70% of them already using it in their professional lives (3). This technology offers the potential to provide personalized and instant financial advice, thus meeting this generation's expectations for a seamless and digitalized customer experience.
📚 A Need for Modern Financial Education
Gen Z's expectations go well beyond traditional online banking services. They seek a personalized experience, accessible 24/7, that offers them real financial education. A striking fact: according to an Oliver Wyman study (4), 60% are attracted to an online financial advisor. Generation Z invests earlier, gets informed via social media, and shows a growing interest in financial advice that incorporates an educational component. Although Generation Z is one of the most educated, they acknowledge needing to learn more about complex financial concepts (1). 61% still trust financial institutions to learn the basics of investing, while about 30% turn to social media, the internet, or their social circle for financial education (1). LiLa is designed to meet this learning need by offering integrated educational resources that allow users to deepen their knowledge on various financial topics.
🚀 Success Examples and AI Impact
AI has the potential to significantly improve customer experience in the financial sector. 63% of Generation Z and 57% of millennials believe AI will enhance customer experience in the financial sector, including financial planning (5). Fintechs like Revolut and N26 have captured Gen Z's attention by offering 100% digital experiences, rich in AI features to personalize the user experience. These companies have demonstrated that integrating AI and machine learning tools into their offerings allows them to better understand and meet the expectations of this demanding generation. This preference for AI is a clear sign that financial solutions must adapt to remain relevant. LiLA capitalizes on this trend by offering a tailored banking experience, accessible anywhere, anytime.
Conclusion
The symbiosis between Generation Z and AI is redefining the contours of modern finance. This silent revolution promises a future where financial services will be more accessible, personalized, and aligned with the values of this new generation of consumers. With its affinity for AI and innovative vision, Generation Z represents the future of the financial sector. Modern finance demands agility and innovation to meet the high expectations of this generation. Financial institutions that can adapt to these new expectations and harness the potential of AI will be best positioned to thrive in this new financial ecosystem.
At Odonatech, we are convinced that LiLa, our solution combining high technology, personalization, and financial education, is the key to this promising future. By aligning with the unique needs of this pivotal generation, LiLa isn't just following trends, it's defining them. By combining the power of AI, expert personalization, and a commitment to ethics, we are shaping the future of banking for this pivotal generation. Embrace the future of finance today with LiLa and join us to discover how LiLa can help you build a lasting relationship with tomorrow's customers.
Sources
Education, Foundation for Economic (2022) "How Generation Z Achieves Financial Independence", Contrepoints, 3 June. Available at: https://www.contrepoints.org/2022/06/03/431687-comment-la-generation-z-accede-a-lindependance-financiere (Accessed: 26 August 2024).
Forbes France (2024) "Generation Z, Preference for Financial Independence and Funded Retirement", Forbes France. Available at: https://www.forbes.fr/business/generation-z-preference-pour-lindependance-financiere-et-la-retraite-par-capitalisation/ (Accessed: 26 August 2024).
La Tribune (2023) "Generative AI: Why is Generation Z Remaining Cautious?", La Tribune, 15 October. Available at: https://www.latribune.fr/partenaires/le-portage-salarial/l-ia-generative-pourquoi-la-generation-z-reste-t-elle-sur-ses-gardes-980024.html (Accessed: 26 August 2024).
Oliver Wyman (2023) "Gen Z: Decoding New Financial Behaviors". Available at: https://www.oliverwyman.fr/notre-expertise/publications/2024/fevrier/etude-oliver-wyman-generation-z-et-comportements-financiers.html (Accessed: 26 August 2024).
Quartz in French (2024) "Older Generations Don't Trust AI to Manage Their Money", Quartz, 4 June. Available at: https://fr.qz.com/ai-finances-personnelles-gestion-de-l-argent-1851518826 (Accessed: 26 August 2024).
Comments