Gen Alpha: A Generation of Firsts
Financial service marketers must always be aware of what’s next, and what’s next is Generation Alpha. The first generation to be born entirely in the 21st century, their lives will be driven by omnipresent screens, a globalized worldview and a desire for authentic experiences.
Born between 2010 and 2025, members of Gen Alpha will soon outnumber Baby Boomers and are still strongly influenced by their mainly Millennial parents. Now is the time for financial service brands to start understanding and building a foundation of trust with this emerging demographic.
Building a relationship with Generation Alpha
To be clear, we’re not suggesting that marketers start targeting children ages 13 and under. There is, however, an opportunity to help their Gen X, Millennial and Gen Z parents teach them financial literacy. In fact, 39% of Millennial parents said they would tell their children ages 12 and younger to start saving early.
From first steps to first accounts
For parents of children eight or younger, financial institutions or services should focus on offering age-appropriate learning tools, such as play money, activity books or games that teach financial literacy. For older children, tie-ins with influencers can help brands feel more authentic, while interactive content can help brands stand out in a sea of paid advertising.
Apps are the new piggybanks
Since Generation Alpha and their parents are digital natives, apps are becoming increasingly popular as a first bank account. Offered by traditional banks, neobanks and nonbank entities, these apps have security and oversight features for parents and financial education features for children. And while there is no one right time, experts believe that children are generally ready for a savings account around the age of nine.
An emerging market with new and traditional players
Many financial institutions, both traditional and digital, are already engaging with Generation Alpha. Capital One offers a free account for children eight and up, as does Chase — although the account is only free to the children of existing checking account customers. New online financial services, such as GoHenry and Greenlight, provide online accounts for as little as $4.99/month. These offer learning features like interactive games for children and notifications and account management tools for parents.
Not to be ignored
Generation Alpha is just starting to take their first steps into the world. Within two years, however, their numbers will grow to over two billion. In 2020, kids six to 18 contributed $24.3 billion to the U.S. economy, and nearly half of kids six-16 have access to their parents’ Amazon accounts.
Any financial services provider hoping to take advantage of opportunities with this emerging demographic will need to start building relationships today, walk the talk when it comes to their values and be fully digitally accessible.
