When I learned that 70% of Gen Z is influenced by financial trends they discover online compared to only 27% of Gen X, I wasn’t surprised.
The newer generation has grown up with social media as their constant companion. They naturally turn to their peers rather than traditional authority figures for guidance.
This fundamental shift explains why many traditional financial institutions appear out of touch to younger audiences, while fintechs continue to gain traction.
Gen X approaches online financial advice with healthy skepticism. They require more evidence of authority and credibility before taking advice from someone on social media.
The Problem With Financial Institution Communication
Most financial institutions create awful content for younger audiences. It’s generic, formulaic, and indistinguishable from competitors.
To connect with Gen Z, these institutions need to break from the norm and speak directly to this audience.
The conservative tone and approach that financial institutions typically adopt actively works against them. Their fear of ruffling feathers or creating the wrong impression leads to sterile, corporate communication that Gen Z simply tunes out.
Speaking more like a human and less like a faceless corporation makes all the difference.
How To Make Complex Financial Topics Digestible
Financial services are complicated by nature. The key is focusing on one concept at a time.
Present a specific scenario or situation that young adults might face, then explain how financial products or services address that particular challenge.
This approach provides an accessible introduction while demonstrating real-world relevance.
According to a 2023 study by FINRA and CFA Institute, 37% of US Gen-Z investors cite social media influencers as a major factor in their decision to start investing, showing the powerful influence these platforms now wield. https://www.cfainstitute.org/insights/articles/how-tiktok-transforming-financial-advice
The Opportunity And Risk For Financial Institutions
For financial service providers, this shift represents a tremendous opportunity. There’s a whole new world of potential customers eager to consume financial products and services.
This audience is growing in size, wealth, and need for financial guidance.
The risk, however, is substantial. If your interaction comes across as disingenuous, it can severely damage your brand.
Building trust with this audience takes time and consistent effort. You either have to do it right or not do it at all.
Building Authentic Social Media Presence
Think and communicate as an individual, not as a corporate entity.
Speak to the hearts and minds of your audience. Be open, honest, and forthcoming in all communications.
When something goes wrong, address it head-on. Don’t hide from mistakes or criticism. Gen Z will call you out quickly if you attempt to sidestep issues.
Proactive communication builds trust, even when facing challenges.
Advice For Gen Z Consumers
For young adults navigating the world of financial advice on social media, my guidance is simple: verify before trusting.
Some creators may have the wrong impression or promote shortcuts that lead to questionable advice. Always validate information beyond social media.
This verification step is where traditional financial institutions can establish their authority by providing resources that help young adults confirm whether they’re on the right track.
Bridging The Gap With New Tools
Financial institutions need to combine their wealth of knowledge with formats that work for shorter attention spans.
AI tools providing conversational advice, short-form videos addressing specific topics, and infographics that deliver information at a glance can all be effective.
The key is making everything easily consumable while clearly establishing your authority and thought leadership.
Some institutions are already seeing success with this approach. Royal Credit Union launched a TikTok channel with just a $500 monthly budget and achieved an average of 300,000 views per video after six months, far outperforming their content on traditional platforms. https://thefinancialbrand.com/news/gen-z-banking/should-banks-offer-gen-z-money-advice-on-tiktok-in-2024-172924/
The Future Of Financial Education
Financial institutions must become more accepting of social media. Many remain hesitant to engage, and when they do, their content often feels generic and corporate.
The solution? Embrace social media fully. Create content tailored to different platform segments. Have some fun with it.
Yes, finance is a serious topic. But remember that behind every financial decision are real people who want to work with someone they trust, like, and believe truly understands them.
Gen Z is five times more likely to get financial advice from social media than adults in their 40s or older. https://www.cnbc.com/2024/01/30/gen-z-gets-money-advice-from-tiktok-what-to-know-about-finfluencers.html
This reality isn’t changing. The financial institutions that will thrive in the coming decade will be those that adapt their approach to meet young adults where they are, speak their language, and build trust through authenticity rather than tradition.
