Getting Millennials and Gen Zs to Invest is Easier Than You Think

To get Gen Zs and Millennials on board with any investment, it is absolutely critical to know how this new breed of investors plays the game.

The term “digital native” is not very new. It dates back to over 20 years ago, thought to be coined by educator Marc Prensky in his 2001 journal article Digital Natives, Digital Immigrants1. Prensky noticed the swelling divide between students who grew up with computer games, email, the Internet, and instant messaging and teachers who turned to more traditional sources of information.

The characteristic traits of digital natives, he described, include a preference for fast and easily accessible information, networking, graphics, and “instant gratification and clear rewards”.

On the other hand, the older “digital immigrants” are in the process of learning the youngsters’ new language and adapting to a world of unknowns. Correspondingly, they tend to underappreciate the tech skills that digital natives have honed since childhood. Prensky explained, “Our digital immigrant instructors, who speak an outdated language (that of the pre-digital age), are struggling to teach a population that speaks an entirely new language”.

But even then, he warned that there was no turning back. Digital immigrants will have to face the fact that they need to get used to a new language and new ways of doing things.

Fast forward 20 years and the good professor’s study looks quite prophetic. As Millennials, and later Gen Zs, finish their education and enter the workforce, the dilemma has spilled over into the business world. With increasing disposable incomes, digital natives are starting to make impactful financial decisions.

To inform these decisions, Millennials and Gen Z overwhelmingly turn to the internet. A survey commissioned by Forbes Advisor reveals that up to 79% of young Americans take financial advice from social media platforms². Young people’s preference for fast and accessible information means that social media sites are powerful tools for investment literacy³.

Another study by Oliver Wyman Forum and The News Movement reveals that younger people are joining the investment game even sooner⁴. Compared to Millennials, Zoomers are 45% more likely to start investing by age 21, with an eye on new kinds of investment products like crypto and ESG.

Younger investors also include a lot more women and people of color. This diverse demographic offers an opportunity for flashy influencers on platforms like TikTok or Discord. This is a generation that appreciates tailored solutions that fit their needs.

The challenge for firms is now the same as Prensky’s generation of educators. Business leaders who belong to the digital immigrant generation have to take extra steps to catch up. To be fair, some banking and investment institutions are already ahead of their peers. Citigroup and NatWest, for example, already have a strong presence on TikTok, a feat that HSBC or Bank of America have yet to achieve.

Millennials and Gen Z see investing as an opportunity to put youthful idealism into practice. A joint study by the Stanford Graduate School of Business, the Rock Center for Corporate Governance, and the Hoover Institution finds that younger generations are more willing to invest in Environmental, Social, and Governance (ESG) investments even if it means higher risks or forgoing larger returns on investment⁵.

Younger folk also remain optimistic about crypto and fintech. The aforementioned Oliver Wyman Forum report also shows that “more than half” of Gen Z respondents plan to increase their crypto holdings well into 2023, despite market turbulence.

One touchpoint though that young generations still share with older ones is physical banking. Although online and mobile banking services are more prevalent than ever before, a Deloitte study says that 56% of Gen Z consumers still prefer a physical bank to open a checking account. Not far from 48% of Millennials and 64% of Baby Boomers. Trust and confidence in traditional financial institutions remain strong⁶.

To be sure, digital immigrants still have to learn new ways of doing things. But these tasks are made easier by the fact that Millennials and Gen Zs are still anchored to familiar expectations. They are not delinquents or excessively nonconformists but are actually optimistic about change and embrace innovation.

For the trickier part of marketing investments, having Millennials and Gen Zs on the team who already know how to speak the language, do the stuff, and follow the trends is going so clutch.

As Marc Prensky puts it, it’s high time to stop grousing about the old ways and follow the Nike motto “Just do it!”

At Global One Media, we seamlessly deliver our client’s message to potential young investors by harnessing the extensive outreach of social media.

Connect with us today and let us start your brand’s journey in the digital space.

¹ Prensky, Marc. Digital Natives, Digital Immigrants
² John Egan, Mike Cetera. Nearly 80% Of Young Adults Get Financial Advice From This Surprising Place.
³ Global One Media. How Social Media Became a Powerful Tool for Investment Literacy and Business
⁴ Oliver Wyman and The News Movement. A-Gen-Z-Report: What Business Needs To Know About The Generation Changing Everything
⁵ Stanford Closer Look Series. ESG Investing: What Shareholders Do Fund Managers Represent?
⁶ Deloitte. Recognizing the value of bank branches in a digital world: Findings from the global digital banking survey.