Young people want to understand financial products before they buy them - here’s why

The financial industry holds up user experience (UX) as the key to customers’ hearts. But what’s all too often forgotten is the education which needs to come with every new product. For many retail consumers, the barrier to entry when reaching financial stability lies in the shortage of information clearly explaining how money-related products work and why they’re important.

"82% still want to learn more about money and finance"

The lack of financial education in UK schools has received renewed scrutiny this year. Following Marcus Rashford’s efforts to help children in poverty get access to free school meals, the 23-year-old Manchester United forward is now pulling the education system into the spotlight. Finance was added to the UK’s curriculum in 2014, yet some 82% of last year’s student intake still want to learn more about money and finance in school.

"An Education-led Strategy"

Having missed out on a financial education at school, Gen Z’ers - those aged 24 or younger and millennials - the demographic spanning 25-39-year-olds - are clamouring to access this education elsewhere. This creates an opportunity for brands to sell financial products for more than simply their shiny UX. A clear content-led strategy which educates potential customers around financial products is paramount to capture this generations’ attention. Financial brands pivoting to this approach couldn’t come at a better time. Whilst money woes have calmed for the nation with the re-introduction of furlough schemes, once these disappear unemployment will spiral again. “At a time when national and ­personal finances are taking a hit, it’s more important than ever that people understand complicated concepts such as interest rates and inflation,” Catherine McGuinness, policy chief at the City of London Corporation, told the Financial Times this month. If done right, there’s huge potential for growth in an education-led content strategy. Gen Z’ers alone possess purchasing power worth $143 billion, according to Business Insider. And according to McKinsey & Company, 52% of Gen Z’ers trust social media influencers for product or brand advice. It’s a win-win. Younger generations get smarter with their money, whilst brands create trustworthy products which galvanise more adoption.

"It's a challenge for everyone"

If we look at financial incumbents, it’s clear that engaging younger audiences is becoming a growing concern. A survey published by Similar Web in 2019 found that traditional banks such as Lloyds and HSBC experienced double-digit declines in website traffic between the end of 2018 and 2019. Daily active users also plateaued or increased incrementally between the two years for high street banks, whilst Monzo achieved more than 100% growth. But challengers are facing hurdles too. Consulting firm Capco found in January that the banking habits of Gen Z’ers are largely “an echo” of their parents’ behaviours. A whopping 74% said their parents selected their bank - which suggests there’s still a lack of alternative resources to help them make their own decision. Brands are clearly not doing enough to fill this resource gap, which in turn drives little motivation for their products. This is also suggested by the fact 8 in 10 UK millennials aren’t on top of their finances, according to HSBC research - the highest ratio of any age bracket. This means current products on the market still aren’t instilling the long-term confidence younger generations need to feel financially secure.

"Who’s using education to solve this?"

In India, wealth-based fintechs are using digital content to create awareness for their products and draw in younger retail investors. App-based investment firm Groww built its own YouTube channel, and conducts workshops in small cities to educate young investors. As a result, more than 60% of Groww users come from smaller cities and towns of India, the majority never having made an investment before. This customer segment is low hanging fruit for Groww, with many underbanked or unbanked. Which means such a marketing approach is the fastest route to a large, loyal customer base. Canadian online investment management service Wealthsimple’s marketing is another great example. The 2014-founded fintech takes a people-focused and highly narrative approach. Its magazine - led by former GQ editorial director Devin Friedman - has launched a ‘Money Diaries’ series which interviews famous figures on their experiences (good and bad) with money. On its platform, the majority of users are under 34 years old. “I think for the millennials we interact with, that reputation (as lousy investors) wouldn’t be fair at all,” chief investment officer Ben Reeves tells Financial Post. “We’re seeing really good long-term investors and we’re seeing those that want to speculate do so in a by-and-large prudent way.” By treating its young audience like serious investors, Wealthsimple is garnering an early loyalty amongst its users that truly challenges big banks. But in the UK, fintechs and banks are still trailing behind when it comes to education and contributor-led digital strategies. As Money Marketing points out, firms in the UK are hesitant to be seen as ‘advising’ on money, following the introduction of the Retail Distribution Review (RDR) in 2012. Whilst firms might produce good products, the way in which they are presented, distributed and digested means they lack material results. Be that in revenue increases or more net new customers. As a consequence, educational strategies are often not treated with the importance they deserve.

"Who’s using education to solve this?"

At GreenLink Digital, we educate financial brands’ audiences through culturally relevant, digestible content. By distributing the content at scale through a variety of different channels, we help financial firms to get their products in front of younger demographics. Consumers are getting smarter and want to receive knowledge through the voice of someone they trust and can relate to. We provide solutions which educate first, inspiring audiences to take action with newly gained knowledge. In 2020, younger generations spend on average 153 minutes per day on social media. Our findings also show that 90% of this demographic won’t even go to a company’s website if they can’t relate to its socials. GreenLink Digital’s approach is three-fold. Firstly, we provide brands with access to a network of financial content creators. Secondly, we provide insights into the latest trends to shape business strategy. And finally, we use partners, vetted financial influencers and paid media to distribute the content to the right audiences. If one lesson can be learnt from our work, it’s that financial brands need to get on TikTok. In the UK alone, TikTok is used by some 3.7 million people in the UK, who engage with the app for an average of 41 minutes a day.

We want to work with companies that want to be relevant.

Start with HELLO