Gen Z Favors TikTok, YouTube for Financial Advice Over FIs

A new survey from the San Antonio, Texas-based marketing solutions company Vericast found that out of four different places Gen Z looks to for financial advice, financial advisors and financial institutions are at the bottom of the list.

Of the Gen Z consumers surveyed, 34% go on the social media app TikTok for financial advice, 33% look to YouTube, 30% seek advice from their financial institution and 24% use financial advisors as a resource. One thousand U.S. adults participated in Vericast’s survey.

Gen Z may be an anomaly when it comes to the popularity of TikTok as a financial advice tool, but the trend of seeking advice outside of one’s bank or credit union stretches beyond the youngest generation of consumers. According to the survey, just 13% of millennials get financial advice from TikTok, but among all consumers surveyed, 44% said they look to their friends or family and only 31% look to their financial institution.

When it comes to what consumers want from their financial institution, rate and fee flexibility during challenging financial times, like the record inflation Americans are currently experiencing; mobile banking capabilities; low interest rates and sign-on bonuses were top of mind for survey respondents. Amid periods of financial uncertainty or difficulty, respondents said they expect flexibility on rates and fees, such as waiving overdraft or late fees (79%); easier access to new lines of credit (66%); and notifications about lines of credit available to them or promotions on special rate offers, such as low interest balance transfers (69%).

Sixty-eight percent of respondents said the promise of fewer fees would motivate them to switch to a new financial institution; 61% listed mobile banking capabilities as a top factor of joining a financial institution; and about 66% said better interest rates and incentives to open an account, such as a cash reward, would sway them to switch institutions. Further strengthening consumers’ negative view of fees, 31% said account service fees are their biggest pet peeve when it comes to their financial institution, followed by overdraft fees (23%), according to Vericast.

The research revealed three opportunities for credit unions looking to gain new and/or deepen existing relationships with members:

• Credit unions can help consumers achieve their three top financial goals for 2022, which survey respondents indicated as building up their savings (48%), paying off debt (47%) and investing in stocks (21%).
• While only 12% of consumers plan to open a new checking account this year and 19% a new credit card, 53% have not opened a new bank account in the past five years, leaving credit unions with new account opening opportunities.
• Despite inflation, consumers are interested in taking out new loans – 42% of respondents said they plan to buy a car in 2022 and 34% plan to upgrade their homes.

What’s more, the survey pinpointed a direct correlation between financial health and happiness – 75% of respondents said the amount of money in their account impacts their mental health.

And despite their desire for mobile banking capabilities, just 38% of consumers have not visited a financial institution in person since the beginning of 2022, the survey found.

“It is clear that financial institutions have a critical need to innovate quickly and reimagine their approach to retain customers,” Stephenie Williams, vice president, financial institution marketing product and strategy at Vericast, said. “Banks and credit unions need to meet customers where they are, not only positioning themselves as a go-to, trusted resource providing education through traditional strategies, but also using new channels and platforms to reach younger generations.”