As reported by The Guardian, cryptocurrencies and online investment platforms have become pop culture touchstones as well as financial products and services. This, and the digital-first (or digital-only) nature of these products mean they are particularly appealing to tech-savvy young consumers.
This has raised Gen Z and Millennial interest in investments in general and both of these groups show a higher interest in investing than older consumers. As the latest Mintel research shows, 11% of Gen Z and 13% of Millennials say investing in stocks and shares is a priority once COVID-19 is no longer a concern, compared to just 4% of Gen X and 3% of Baby Boomers. As younger consumers don’t have the same financial security as older generations, with the concept of home ownership seemingly out of reach for many, it’s understandable why they’d rather choose to take risks.
However, there is a big difference between interest in investments as a fun pursuit – something of a game or hobby – and a meaningful attempt to generate wealth. Ultimately, young adults do not have as much money as older generations to put towards investments and are more likely to need easy access to savings to pay for big-ticket items, such as furniture or technology, as they set out on their own.
While there is increasing interest in investments among younger consumer groups, cash savings will remain the key products to help them reach their goals. In fact, over a fifth of Gen Z are planning to prioritise saving for long-term goals after the pandemic. These funds will be held in savings accounts to fund major financial ambitions such as home ownership.
An opportunity for financial services
As more and more people invest online, they are turning to social media for help. Online investing has a well-established online community, including social media influencers and content creators giving out free financial tips on platforms such as TikTok, YouTube and Instagram.
Ultimately, the vast variety of information available online makes it increasingly difficult for people to determine which creators are knowledgeable and offer genuine guidance, putting younger consumers at risk of losing money they cannot afford to lose. There is an opportunity here for financial services to step in and offer services and products to help young people with their investment decisions.
