Gen Z, the generation that grew up with smartphones and social media, is now coming of age, and their influence is being felt across all aspects of society, particularly in the realm of finance.
No longer just teenagers, the oldest members of this cohort are entering their 30s, and they're bringing a whole new perspective to work, business, and relationships, especially when it comes to managing their money.
A recent Green Shoots Radar survey by Visa revealed that Gen Z in the Asia Pacific region, including the Philippines, is embracing a dynamic and holistic approach to financial management, driven by a desire for independence and a deep understanding of the ever-evolving financial landscape.
The survey painted a picture of a generation that’s both pragmatic and aspirational. While they’re known for their tech-savviness, Gen Z is also demonstrating a strong commitment to saving.
The Visa study found that they typically set aside around 30 percent of their income, a testament to their focus on financial security. This isn't just blind saving; it's driven by a heightened awareness of their financial goals, with nearly half of the respondents citing this as a key motivator.
Furthermore, they’re not just saving; they’re actively engaged in improving their financial management skills, recognizing the importance of a sound financial footing in today's uncertain world.
“Gen Z is a generation that values flexibility and innovation, leveraging digital tools to navigate an increasingly dynamic financial landscape,” said Jeffrey Navarro, Country Manager for Visa Philippines.
“At Visa, we are committed to empowering Gen Z with secure, accessible, and innovative payment solutions that align with their needs and aspirations. Through our advanced technologies and educational initiatives, we aim to support their journey toward financial independence and long-term success,” he added.
This desire for financial independence is intertwined with their digital-first lifestyle. Gen Z are digital natives, comfortable using technology for everything from social interaction to shopping and banking.
The Visa survey highlighted this, with 60 percent of Gen Z in the Asia Pacific region already owning a credit card, demonstrating their embrace of cashless transactions.
They rely on mobile wallets, contactless payments, and integrated financial apps to manage their finances with ease and accessibility.
For them, financial independence is a tangible goal, facilitated by the seamless integration of technology into their lives.
But Gen Z’s financial approach isn't solely about saving and budgeting. They also value experiences and are willing to spend on things that are meaningful to them.
Travel and vacations top their list of big-ticket items, followed by electronics and mobile devices. This reflects their desire to balance financial responsibility with enjoying life, a key characteristic of this generation.
They’re not just saving for the sake of saving; they’re saving to enable the experiences and purchases that align with their values and aspirations.
This nuanced approach to finances is forcing businesses to rethink how they engage with this influential demographic. Visa recognized this and is empowering businesses with its Value-Added Services (VAS).
These services, which include Acceptance Solutions, Issuing Solutions, Visa Protect, and Advisory Services, provide businesses with the insights and tools they need to connect with Gen Z.
By understanding Gen Z’s preferences and behaviors, businesses can tailor their offerings and communication strategies to resonate with this tech-savvy and financially conscious generation.
Visa’s Advisory Services, for example, can provide valuable data on Gen Z’s spending habits and payment preferences in the Philippines, allowing businesses to optimize their customer acquisition, engagement, and retention strategies.
The rise of Gen Z is not just a demographic shift; it’s a cultural transformation. Their approach to finances, characterized by a blend of pragmatism, digital fluency, and a desire for meaningful experiences, is reshaping the financial landscape.
They’re not just the consumers of tomorrow; they’re the driving force behind the evolution of payments and commerce today. As Gen Z continues to mature and their financial influence grows, businesses that understand their needs and adapt to their preferences will be the ones that thrive in the years to come.