Name: Gen Z: The first steps to better financial habits
Uploaded: 2022-04-26T11:11:34.486Z
Duration: 632.63

Gen Z The First Steps To Better Financial Habits-1.m4v

Gen z Jurgen.vtt

English

{{00:00:00}}
Start young within the
means of your own financial

{{00:00:04}}
capacity, but start young.

{{00:00:06}}
Invest regularly and don't
look too much at your position.

{{00:00:14}}
Investing and financial
literacy, as such, tends to

{{00:00:18}}
have a low rate of return.

{{00:00:20}}
I think preferably I like to have
technology as an enabler to get

{{00:00:24}}
into the world of people that would
otherwise not be reached by banks.

{{00:00:28}}
For example, also dealing with
their investment offering in

{{00:00:31}}
a way that helps people to get
familiar with investing through

{{00:00:36}}
other financial services, like for
example, payments, or other examples.

{{00:00:40}}
And I use the payments as a reference
because pretty much everywhere around

{{00:00:44}}
Europe and also in the states, the idea
of micro investing has become more and

{{00:00:49}}
more popular where you say I'm going
to allow that my bank rounds up my

{{00:00:54}}
digital payments with the roundings
contributing to an investment.

{{00:00:58}}
And I think that's a very good
example of how you can reach people

{{00:01:01}}
that have no time, no interest or no
knowledge, so to speak about investing.

{{00:01:06}}
But nevertheless, start to gradually
get to know what it is to invest at

{{00:01:11}}
some point in their life when they're
financially ready, so to speak,

{{00:01:15}}
they're going to perhaps hopefully
get more financial interest, more

{{00:01:18}}
interest in investing and contribute
to their own financial health.

{{00:01:22}}
And are there any ways
that fintechs can help?

{{00:01:25}}
So I guess you've mentioned
some around sort of rounding up.

{{00:01:27}}
Is there anything else that
fintechs are doing to, I

{{00:01:30}}
guess, get them engaged?

{{00:01:32}}
What we do at everyoneINVESTED
is to build on insights from

{{00:01:35}}
behavioural finance in order
to compensate the lack of human

{{00:01:39}}
assistance in a digital process, for
example, with respect to investing.

{{00:01:43}}
And I think that's where really
fintechs can help to take

{{00:01:47}}
digitisation beyond automation.

{{00:01:50}}
If you compare, for example, the
process of applying for a loan or a

{{00:01:53}}
credit, if you automate that as a bank,
that's quite successful immediately,

{{00:01:58}}
because people need to have the money
and receive the money at the end of

{{00:02:02}}
the process, and they want to click
to get it as quickly as possible.

{{00:02:05}}
But with investments, again, with
people sitting in the comfort of

{{00:02:09}}
their own living room with their
smartphone, it's much more difficult

{{00:02:12}}
to get to the end of the process
and physically transfer money from a

{{00:02:16}}
savings account to an investment if
you don't have an advisor or any other

{{00:02:20}}
human tapping you on the shoulder and
encouraging you to make that decision.

{{00:02:24}}
So we think that adding insights
from behavioural finance, which is

{{00:02:28}}
basically algorithms that help to
trigger desired behaviour is able

{{00:02:33}}
to make your digital investment
processes as a bank more performing

{{00:02:37}}
and allowing you then to reach more
people through digitalisation as a

{{00:02:41}}
means, and not as a goal in itself.

{{00:02:43}}
How can FinTech help Gen Z navigate
different FinTech products across

{{00:02:47}}
the different stages of their lives?

{{00:02:48}}
So, well, to be perfectly honest, my
expertise is more on the investment

{{00:02:51}}
side, but I think also there's a
life cycle that you can identify

{{00:02:56}}
in the sense that we, in some kind
of way, we are all born savers.

{{00:03:00}}
And at some point in our lives,
we make our first investment.

{{00:03:04}}
And in many dimensions, that's the
most difficult step from zero to one.

{{00:03:10}}
And I think there, fintechs can
really encourage people to make

{{00:03:13}}
that step as a constant decision
and really as a first step towards

{{00:03:17}}
more, if fintechs again, are able to
take it beyond automation and beyond

{{00:03:22}}
just some technology, fancy thing
and basically position investing as

{{00:03:29}}
contributing to your financial health
and starting a long-term investment

{{00:03:33}}
relationship, depending on your own
financial means, of course, rather than

{{00:03:37}}
yet another fancy trading platform.

{{00:03:39}}
Which for example, in my country,
Belgium, very recently the national

{{00:03:43}}
or the regulator did a study on the
participants in the local stock market

{{00:03:48}}
over the past two years during the
COVID period, and apparently a massive

{{00:03:52}}
amount of young people entered into
the stock market for the first time.

{{00:03:56}}
Which is very encouraging, which
is very good, which definitely

{{00:04:00}}
contributes to their financial
literacy, but I really hope that

{{00:04:03}}
they are there for, well, for longer
periods of time, that it really

{{00:04:06}}
starts a long-term venture rather
than, okay, the hype of the moment.

{{00:04:11}}
And as soon as the markets
is more challenging that

{{00:04:14}}
they're again stable for life.

{{00:04:15}}
And I'm just curious, do you sort of
see younger people today investing

{{00:04:23}}
younger or is it kind of on par
with how people invest in the past?

{{00:04:27}}
I think it's very crucial that you do
not come with a teaching finger and

{{00:04:32}}
talking about the virtues of investing
and oh, even if you take inflation

{{00:04:35}}
to account, it's even worse if you
continue to save, but rather try to

{{00:04:40}}
embed it in their day-to-day life.

{{00:04:42}}
And again, I like to make the
reference to this micro-investing

{{00:04:44}}
and the running of digital payments.

{{00:04:46}}
We have launched a service in several
countries, and for example, we see

{{00:04:50}}
that the average age of the people
using that are 25 years younger

{{00:04:55}}
than the conventional investors at
the banks that we launched this at.

{{00:04:58}}
Because simply the conventional
investors that are more progressed

{{00:05:01}}
in this life cycle of their financial
health have decent portfolios, visit

{{00:05:06}}
a branch to talk to an advisor.

{{00:05:08}}
But with this rounding of digital
payments, as easy as it sounds,

{{00:05:12}}
is able to recruit new investors
with not talking about investing

{{00:05:17}}
in technical or too difficult terms
and rejuvenating the client base

{{00:05:23}}
of the banks, which is really also
beneficial for their financial health.

{{00:05:27}}
So, Jurgen, you mentioned that people
are sort of seeking or needing that

{{00:05:31}}
kind of tapping on the shoulder
when it comes to investing, as we

{{00:05:36}}
look at 39% of Gen Z are seeking
out personal financial advice from

{{00:05:40}}
social media, some of them are really
using things like TikTok and YouTube

{{00:05:45}}
to do that, can and should FinTech
create solutions and sort of curate

{{00:05:50}}
that based on the use of social
media and the different expectations

{{00:05:53}}
that Gen Z is having around sort of
wanting to do it on those platforms?

{{00:05:58}}
Well, I'm going to say I'm
personally not that much into TikTok.

{{00:06:00}}
My children are more than I am.

{{00:06:03}}
But I do think related to that,
for example is advocacy marketing.

{{00:06:08}}
Meaning that people like you, knowing
what they like and what their behaviour

{{00:06:13}}
is in certain circumstances, comparable
to yours is much more value than

{{00:06:18}}
expert opinions sometimes, which
I think is very much an enabler.

{{00:06:23}}
It should not necessarily be the
only thing you base yourself on or

{{00:06:27}}
you base your decisions on, but it
definitely is an encouragement factor.

{{00:06:31}}
So yes, I think fintechs, there
are platforms, for example, around

{{00:06:37}}
that link your trading behaviour
to that of peers that have certain

{{00:06:42}}
similarities in terms of behavioural
or socioeconomic parameters, so

{{00:06:46}}
that you can try to link yourself.

{{00:06:50}}
And have a kind of a confirmation
that your behaviour is pretty

{{00:06:54}}
rational if you compare it to others.

{{00:06:56}}
Unless of course the others are equally
irrational as yourself, but the common

{{00:07:00}}
denominator is that, okay, there is
some wisdom in the crowd, so to speak.

{{00:07:03}}
So how can banks curate their
digital transformation based on the

{{00:07:07}}
financial wellness needs of Gen Z?

{{00:07:09}}
Well, I think banks should try to
use their digital transformation

{{00:07:15}}
or the digital processes or
innovation projects, trying to

{{00:07:19}}
make, well, reach more people,
younger people, non investors, by

{{00:07:27}}
making it as easy as possible to
start to invest, which is really a

{{00:07:32}}
very difficult balance to strike.

{{00:07:33}}
If you have, on the one hand, it's a
very regulated environment, everything

{{00:07:39}}
that has to do with investing.

{{00:07:40}}
And if you need to do that in a purely
digital way, it's quite challenging.

{{00:07:44}}
Once more, because of this lack
of human encouragement, to pull

{{00:07:46}}
it off, to really engage people
to start this first investment

{{00:07:50}}
sitting in the comfort of their own
living room with their smartphone.

{{00:07:53}}
But I think that's really where
the cutting edge is because

{{00:07:57}}
banks are seeking for a number
of things, but most of the banks

{{00:08:00}}
have two things on their top list
of priorities, which is lowering

{{00:08:04}}
the cost of investor acquisition.

{{00:08:06}}
How can we as a bank recruit
more investors digitally

{{00:08:10}}
to get our costs down?

{{00:08:11}}
And second is how can we generate
net sales and investments

{{00:08:15}}
through digital channels?

{{00:08:16}}
Or put differently, how can we
get these massive amounts of the

{{00:08:20}}
savings accounts into investments,
preferably in a digital way?

{{00:08:24}}
And I think there, the angle is to do
that in a way that first of all, the

{{00:08:27}}
process itself is more than automation.

{{00:08:29}}
What I mentioned previously.

{{00:08:31}}
Which secondly, will help
them to recruit new investors.

{{00:08:34}}
Because if you look at, for
example, across Europe, to the

{{00:08:37}}
average number of the percentage
of banking clients holding an

{{00:08:41}}
investment, it's well, 15% at best.

{{00:08:45}}
Meaning on average in European banks,
there's 85% of the banking clients

{{00:08:50}}
not holding any investment at all.

{{00:08:52}}
So there's a big room for
improvement and if you go digital,

{{00:08:56}}
why not start with the young?

{{00:08:57}}
Do you think that we'll see more
FinTech solutions promoting financial

{{00:09:00}}
literacies, maybe in schools or in
workplaces as we start to develop

{{00:09:04}}
maybe incorporating some of these
kind of smart apps and technologies

{{00:09:08}}
that will sort of enhance that?

{{00:09:10}}
I think so, definitely yes.

{{00:09:11}}
Because there's also more and more
encouragement from regulators and

{{00:09:15}}
government agencies that businesses
like banks and fintechs promote

{{00:09:20}}
what they call smart tooling.

{{00:09:23}}
Tooling that allow people,
specifically retail investors,

{{00:09:26}}
old and young, to make more
conscious investment decisions.

{{00:09:29}}
Because the concern from these
regulators for the sake of investor

{{00:09:32}}
protection is that with the well, with
the wild grow in the proliferation

{{00:09:37}}
of all kinds of digital, fancy
stuff, cryptos and whatever that at

{{00:09:41}}
some point in time that will start
to increase the systemic risks or

{{00:09:45}}
other kinds of herding behaviour.

{{00:09:47}}
And that's why, for example, very
recently, the European commission

{{00:09:50}}
last week launched a consultation
paper, asking really for input on

{{00:09:55}}
how can we make sure that through
smart tooling as I call it, we

{{00:10:00}}
help retail investors to take more
conscious and more rational long-term

{{00:10:05}}
decisions in terms of investing.

{{00:10:06}}
What are your top three pieces
of advice for Gen Z around

{{00:10:10}}
becoming financially literate?

{{00:10:13}}
Start young, within the
means of your own financial

{{00:10:17}}
capacity, but start young.

{{00:10:19}}
Invest regularly and don't
look too much at your position.

{{00:10:22}}
Well, thank you, Jurgen, so much.

{{00:10:23}}
It's been an absolute pleasure
speaking with you today.

{{00:10:25}}
My pleasure.

Start young within the
means of your own financial

Invest regularly and don't
look too much at your position.

Investing and financial
literacy, as such, tends to

I think preferably I like to have
technology as an enabler to get

into the world of people that would
otherwise not be reached by banks.

For example, also dealing with
their investment offering in

a way that helps people to get
familiar with investing through

other financial services, like for
example, payments, or other examples.

And I use the payments as a reference
because pretty much everywhere around

Europe and also in the states, the idea
of micro investing has become more and

more popular where you say I'm going
to allow that my bank rounds up my

digital payments with the roundings
contributing to an investment.

And I think that's a very good
example of how you can reach people

that have no time, no interest or no
knowledge, so to speak about investing.

But nevertheless, start to gradually
get to know what it is to invest at

some point in their life when they're
financially ready, so to speak,

they're going to perhaps hopefully
get more financial interest, more

interest in investing and contribute
to their own financial health.

And are there any ways
that fintechs can help?

So I guess you've mentioned
some around sort of rounding up.

Is there anything else that
fintechs are doing to, I

What we do at everyoneINVESTED
is to build on insights from

behavioural finance in order
to compensate the lack of human

assistance in a digital process, for
example, with respect to investing.

And I think that's where really
fintechs can help to take

If you compare, for example, the
process of applying for a loan or a

credit, if you automate that as a bank,
that's quite successful immediately,

because people need to have the money
and receive the money at the end of

the process, and they want to click
to get it as quickly as possible.

But with investments, again, with
people sitting in the comfort of

their own living room with their
smartphone, it's much more difficult

to get to the end of the process
and physically transfer money from a

savings account to an investment if
you don't have an advisor or any other

human tapping you on the shoulder and
encouraging you to make that decision.

So we think that adding insights
from behavioural finance, which is

basically algorithms that help to
trigger desired behaviour is able

to make your digital investment
processes as a bank more performing

and allowing you then to reach more
people through digitalisation as a

How can FinTech help Gen Z navigate
different FinTech products across

So, well, to be perfectly honest, my
expertise is more on the investment

side, but I think also there's a
life cycle that you can identify

in the sense that we, in some kind
of way, we are all born savers.

And at some point in our lives,
we make our first investment.

And in many dimensions, that's the
most difficult step from zero to one.

And I think there, fintechs can
really encourage people to make

that step as a constant decision
and really as a first step towards

more, if fintechs again, are able to
take it beyond automation and beyond

just some technology, fancy thing
and basically position investing as

contributing to your financial health
and starting a long-term investment

relationship, depending on your own
financial means, of course, rather than

Which for example, in my country,
Belgium, very recently the national

or the regulator did a study on the
participants in the local stock market

over the past two years during the
COVID period, and apparently a massive

amount of young people entered into
the stock market for the first time.

Which is very encouraging, which
is very good, which definitely

contributes to their financial
literacy, but I really hope that

they are there for, well, for longer
periods of time, that it really

starts a long-term venture rather
than, okay, the hype of the moment.

And as soon as the markets
is more challenging that

And I'm just curious, do you sort of
see younger people today investing

younger or is it kind of on par
with how people invest in the past?

I think it's very crucial that you do
not come with a teaching finger and

talking about the virtues of investing
and oh, even if you take inflation

to account, it's even worse if you
continue to save, but rather try to

And again, I like to make the
reference to this micro-investing

We have launched a service in several
countries, and for example, we see

that the average age of the people
using that are 25 years younger

than the conventional investors at
the banks that we launched this at.

Because simply the conventional
investors that are more progressed

in this life cycle of their financial
health have decent portfolios, visit

But with this rounding of digital
payments, as easy as it sounds,

is able to recruit new investors
with not talking about investing

in technical or too difficult terms
and rejuvenating the client base

of the banks, which is really also
beneficial for their financial health.

So, Jurgen, you mentioned that people
are sort of seeking or needing that

kind of tapping on the shoulder
when it comes to investing, as we

look at 39% of Gen Z are seeking
out personal financial advice from

social media, some of them are really
using things like TikTok and YouTube

to do that, can and should FinTech
create solutions and sort of curate

that based on the use of social
media and the different expectations

that Gen Z is having around sort of
wanting to do it on those platforms?

Well, I'm going to say I'm
personally not that much into TikTok.

But I do think related to that,
for example is advocacy marketing.

Meaning that people like you, knowing
what they like and what their behaviour

is in certain circumstances, comparable
to yours is much more value than

expert opinions sometimes, which
I think is very much an enabler.

It should not necessarily be the
only thing you base yourself on or

you base your decisions on, but it
definitely is an encouragement factor.

Gen Z

Expert Insight

Gen Z is the diverse, socially conscious, side-hustle generation best known for being digital natives. How will they change the future of finance?
In this episode of our "Gen Z" series, behavioural finance expert Jurgen Vandenbroucke says we are all born natural savers, but fintech can help the younger generation in their first steps towards new investment habits and greater levels of financial wellness.

Finfluencers

Tiktok

Financial Literacy

Financial Wellness

small_J-rgen-Vandenbroucke-iVBORw0KGg-4abe8e01fff966c1310b227af8453120.png

thumbnail_J-rgen-Vandenbroucke-iVBORw0KGg-4abe8e01fff966c1310b227af8453120.png

xsmall_J-rgen-Vandenbroucke-iVBORw0KGg-4abe8e01fff966c1310b227af8453120.png

J-rgen-Vandenbroucke-iVBORw0KGg-4abe8e01fff966c1310b227af8453120.png

Jurgen Vandenbroucke

Managing Director

Perhaps financial literacy is not such a big problem. With applications like micro-investing, young individuals could gain a better sense of financial wellness early and gain more control over their finances.


Is Financial literacy a problem?

Fintechs could add insights from behavioural finance that could contribute to the investment performance by triggering the desired behaviours. 
Moving digitisation beyond automation could help Gen Z to take the hard first step toward investing. 

Fintechs' role

Gen Z sometimes values social media advocacy more than expert While it shouldn't be your only basis, it can certainly be an encouragement factor.


Social media's role

In a heavily regulated environment, it is quite challenging for banks to curate products for the new generation and engages with more new investors in a purely digital way. 