How Gen Z Uses Money Management Apps

Generation Z consumers are so accustomed to using digital services that they place a premium on the ability to manage their finances from any location and on any device. When it comes to choosing a financial institution, online and mobile banking capabilities are the most essential criteria for Gen Z, according to a recent survey by financial advisory firm Zafin.

The Covid-19 pandemic also has accelerated adoption of mobile banking: 66% of Gen Zers—the 41 million adults born after 1996—said they value smartphone banking more than they did before the pandemic began in 2020, Zafin said.

Using Financial Apps to Manage Finances

About 3% of the 5.9 million available apps for smartphones are finance apps, according to statistical website Statista. These apps enable consumers to check their account balances, transfer money, draw up a budget, buy stocks and bonds, shop online, pay down their credit card balances, and do their taxes.

Google surveyed smartphone users about their use of financial apps and found that 73% had used a finance application on their phones in the last month.

The proliferation of apps for managing finances is contributing to greater awareness about how to manage money. One recent British study found that when consumers use finance apps, significant improvements were found in a number of measures designed to gauge financial knowledge, understanding, and basic skills. "These improvements translated into better financially capable behaviors," and people using the apps "were more likely to keep track of their income and expenditure and proved to be more resilient when faced with a financial shock," the study said.

Looking at Gen Z app usage between the third quarter of 2019 and the same quarter of 2020, mobile analytics firm App Annie said finance apps had the strongest growth in total time spent by Gen Z consumers in all categories, growing 60% in the 12-month period.

Is a Bot Better Than a Live Person?

In addition, the MX survey found that 53% of Gen Z consumers and 42% of millennials said they want to find answers to their finance questions online rather than through a phone call or going into a branch. In fact, according to Adobe Analytics, 44% of Gen Zers have already used a bank app chatbot to answer their financial questions, and 66% said it was a better experience than talking to someone in person. Still many customers find chatbots impersonal and frustrating. For these customers, Fifth Third’s Mobile Banking App offers an "Ask Us" option that lets customers chat with a live representative.

Some 84% of Gen Zers and millennials surveyed by shopping website Klarna said the profusion of smartphone technology has helped them to effectively manage their money. And 63% also said that technology makes it possible for them to have better oversight of all their finances.

Watch Stock Portfolios

Global Wireless Solutions (GWS), a Dulles, Virginia based network benchmarking and analysis firm, said all consumers increased use of finance apps during the pandemic, but this was especially true of members of Gen Z, who doubled the time they spent checking their finances on their phones, spending 127% more time specifically looking at their investments than they did before the pandemic. By bringing money management to their fingertips during a time of isolation, these apps helped many people manage the financial stress they were experiencing and eliminated the need to travel to branches, saving time and money that would be spent on gasoline.

While young power users increased their time on commission-free stock trading apps, there was also a surge in the use of apps for food stamp management, GWS said.

But there is one area where Generation Z still prefers human contact over smartphone technology: financial advice. When mutual fund firm Morningstar interviewed 1,100 members of Gen Z, they overwhelmingly rated human advisors above digital advice available online. Only 18% had used a so-called robo-advisor, which uses algorithms to make investment recommendations based on artificial intelligence.

To meet the needs of these customers, Fifth Third has highly trained personal bankers at the ready to offer financial advice. Consumers can schedule an appointment with a personal banker by clicking here.