Most Generation Z Borrowers Manage Their Finances Online

Young adults' expectations of financial services differ from those of middle-aged and older adults in many areas. They favor mobile platforms that are available 24 hours a day, from anywhere, and base their major decisions on "finfluencers", often contemporary influencers who are knowledgeable about finance. Three quarters of Provident's Generation Z customers interact exclusively online with the financial services provider, which is committed to understanding the needs of this generation, which are strongly influencing the industry's vision for the future. Results of a Provident Financial Ltd. survey show how Generation Z's financial behavior differs from the past, and what new trends and directions this is leading to in their money management habits.

Around 10% of Provident's customers are Generation Z, those born between the second half of the 1990s and the first half of the 2010s. These 22,000 customers under the age of 28 prefer to use the financial service provider's webchat function, meaning they communicate with Provident staff via a digital platform during business hours, even when they need personalized assistance.

Generation Z members are now true digital natives. What does this mean? They are the first generation to be ready for the world of internet, social media and smart devices. The online space has become their primary and natural medium for knowledge acquisition and socialization, and digitalization has become a fundamental norm in their worldview. They adapt quickly and easily to technological innovations, and the use of digital tools is a key part of their daily lives.

Their close connection to digitalization is also reflected in their financial habits. They expect services that are conveniently available to them 24 hours a day. They prefer mobile banking services to traditional banking, as well as a variety of financial mobile applications that allow them to manage their finances from anywhere and at any time. The internet also plays a key role in their financial decisions: in addition to advice from parents, friends and financial advisors, social media is the most important source of information for them than for any other generation, but they also often get their information from online searches or videos from influencers. According to PYMENTHS Intelligence's 2023 International Survey, 34% of Generation Z consumers report that they have been influenced in their decision making by the advice of influencers – also known as finfluencers – who produce financial content.

A representative survey commissioned by Provident Financial Ltd.'s parent company, International Personal Finance (IPF), in June 2024, also found that 20.6% of 18–34-year-olds plan all their spending in advance, just below the 21.1% of 35–54-year-olds. 38.6% of 18–34-year-olds set aside some money every month or at least regularly to save. Buying a home or renovating remains the most common goal for savings, with 40.7% of young people indicating this as a priority. In addition, 32.8% would use their savings for travel and leisure. More than 40% of 18-34-year-olds said that interest rates and monthly repayments were the most important factors when taking out a loan, but 7.2% also considered convenience to be an important factor, while 6.3% said that an easy-to-use mobile app was particularly important. The survey also shows that 55.4% of the age group feel confident in their knowledge of financial products and services.

"As a responsible company in the financial sector, it is our duty to listen to the needs and expectations of the younger generations regarding finance and financial market participants. Generation Z members represent an increasing slice of the active society. They are not only financially aware, but also socially and environmentally aware, with a strong emphasis on aspects such as ethical consumption and sustainability. It is important to pay attention to them now, to get to know how they think about money, as their commitment to the digital world and new financial tools and applications will have a significant impact on the future of the financial sector," Márta Pálfalvi, Director of Corporate Relations and Communications at Provident Financial Ltd., pointed out.