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A Fintech Survival Guide to Understanding Gen Z Finance

Education | Feb 8, 2024

Understanding Gen Z Finance:  A Fintech Survival Guide

As Generation Z (born between 1997 and 2012) steps into financial independence amidst economic challenges, their unique financial behaviors, preferences, and terminologies come to the forefront.

Understanding these aspects is crucial for fintech professionals aiming to engage, communicate, and develop services for this demographic effectively.

See:  Gen Z VCs are entrepreneurial, digitally native, values-focused

This guide aims to provide fintech professionals with insights into Gen Z's financial mindset and practical tips for engaging with this generation effectively. As Gen Z's influence grows, so does the importance of adapting fintech offerings to meet their expectations and needs.

Gen Z Finance Terms Explained

These Gen Z finance terms open up conversations about finances in a more relatable and less taboo manner.

  • Bougie / Boujee: Refers to someone with expensive, lavish tastes. It's about enjoying the finer things in life without shame.
  • Bread: A slang term for money, derived from the idea that bread is made of dough, which is another common slang term for money.
  • Cash Stuffing: Also known as the cash envelope method, this budgeting technique involves allocating specific cash amounts for different expenses. It has gained popularity on TikTok among Gen Z, though experts caution against having too much cash on hand.
  • Doom Spending: Similar to doom scrolling, doom spending involves spending money despite economic concerns, often as a way to cope with stress. A significant portion of Gen Z engages in this behavior, choosing to cherish purchases now instead of saving for an uncertain future.
  • Drip: Used to describe someone wearing expensive items or a nice outfit in general. It's about showcasing wealth or style through clothing and accessories.
  • Finesse: To trick someone into giving you something, often used in the context of acquiring money or benefits cleverly.
  • Flex: To show off possessions, knowledge, or other intangibles. It's about displaying one's success or wealth openly.
  • Free Money: A term that encompasses any monetary gain that doesn't affect one's current bank account balance, such as gifts, store credits, negative credit card balances, and cash back.

See:  Fintech Fridays EP55: Global Hiring Trends: How Gen Z Talent Thrives

  • Girl Math: A lighthearted concept among young women rationalizing spending through humorous comparisons, like considering a purchase "practically free" if it's under a certain amount.
  • Glo Up: When someone looks better or has a better lifestyle than before. It's about personal improvement and success.
  • Guap: Means a lot of money. It's used to describe having a significant amount of wealth.
  • Gucci: Derived from the high-end fashion brand, meaning you're doing well or everything is good.
  • Live Your Best Life: Enjoying life to the fullest in a unique, individual way.
  • Loud Budgeting: A term coined by TikTok user Lukas Battle, emphasizing saving money not because of a lack of funds but as a choice to not spend. It's about being vocal and proud of saving money, seeing it as a flex.
  • Secure the Bag: Getting money or accomplishing goals in general. It's about achieving success and financial stability.
  • Soft Savings: This concept describes Gen Z's preference for spending on experiences and personal growth now rather than saving for the future. They prioritize mental wellbeing and personal fulfillment over early retirement.

Financial Mindset and Challenges

  • A significant challenge for Gen Z is their lack of emergency savings, exacerbated by high living and college costs, alongside entry-level job wages. This lack of savings negatively impacts their mental health, with over half reporting financial concerns as a stressor.
  • Gen Z shows a preference for less volatile investments, with 38% moving their money from stock-related investments to safer options like savings accounts, money market funds, CDs, or government bonds. This is a higher percentage compared to millennials (33%) and Gen Xers (17%).  Having said this, there is some mixed research on this question with a CFA and FINRA survey concluding that Gen Z Canadian's are actively investing.

See:  Millennial and Gen Z Workforce Demand Purpose-Driven Work: Deloitte Survey Insights

  • The impact of the economy, including inflation and rising prices, has a significant impact on Gen Z's mental health. Key stressors include paying for everyday expenses and housing costs, with over a quarter reporting unemployment and actively seeking jobs.
  • Achieving financial independence is a considerable challenge for Gen Z. They face unique financial challenges as they navigate adulthood, such as paying for college, starting a career, and establishing a budget.

Approach to Money

  • For Gen Z, education is often viewed as a pathway to financial stability, with 88% of the first Gen Z grad class choosing majors based on job availability.
  • Growing up in the age of technology, Gen Z's money habits are heavily influenced by the internet and social media. They are more likely to seek financial advice online and use budgeting tools and apps.
  • A significant portion of Gen Z receives financial support from parents for housing and health insurance. However, there are misconceptions about the importance of building credit and investing for retirement, with many not recognizing the need to start these financial practices early.
  • Gen Z prefers online banking, with a majority content to do their banking completely online with only 20% opting for brick-and-mortar for everyday financial needs. They are less likely to have written a check or visited a physical bank, indicating a shift towards digital financial management.

Bottom Line

Understanding Gen Z's unique financial challenges and mindset is crucial for fintech companies looking to engage this demographic.

See: 

Fintech Opportunities in Wealthy Retired Boomer Markets

Fintech Opportunities in the Wake of Tightened Credit Liquidity in Canada

Fintech solutions that offer educational resources, tools for managing finances, and options for low-risk investments can appeal to Gen Z's desire for financial stability and mental well-being. Additionally, promoting financial literacy and independence through user-friendly platforms can help address some of the misconceptions and anxieties Gen Z faces regarding money.


NCFA Jan 2018 resize - A Fintech Survival Guide to Understanding Gen Z FinanceThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Millennial and Gen Z Workforce Demand Purpose-Driven Work: Deloitte Survey Insights

Fortune | Elizabeth Faber  | Jul 6, 2023

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Image: Unsplash/Eliott Reyna

Ethical alignment and purpose-driven work significantly influences career decisions of Gen Z and Millennials

  • Deloitte's latest Global Gen Z and Millennial Survey reveals that nearly 40% of respondents have rejected work assignments due to ethical concerns, and over a third have declined offers from employers they perceive as lacking in areas such as environmental responsibility, diversity, equity, and inclusion (DEI), or mental health initiatives.
    • This underscores the importance of ethical alignment between employees and their organizations, a factor that significantly influences career decisions among younger generations.
  • Purpose-Driven Work is a Must:
    • The survey indicates that over 80% of Deloitte's global workforce, approximately 330,000 employees, belong to the Millennial and Gen Z demographics.
    • These generations are not satisfied with merely working for purpose-driven organizations; they want to actively participate in driving societal change through their work.
    • However, only half of the respondents feel empowered to drive change within their organizations, highlighting a gap that employers need to address.

Emerging Investors: Gen Z Canadians Take the Lead in Global Investment Trends

Fintech Fridays EP55: Global Hiring Trends: How Gen Z Talent Thrives

  • Climate Action:
    • Over half of the respondents research a company's environmental impact and policies before accepting a role, and a quarter plan to change jobs or sectors due to climate concerns.
    • Only 15% of Gen Z and Millennial respondents feel they can influence their organization's sustainability efforts.

Organizations must prioritize purpose and impact, promote ethical alignment, and empower employees to drive change. This not only secures long-term commitment from these generations but also creates financial and social value for the organization.

View more --> here

Download the 38 page PDF Survey report --> here


NCFA Jan 2018 resize - Millennial and Gen Z Workforce Demand Purpose-Driven Work: Deloitte Survey InsightsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Emerging Investors: Gen Z Canadians Take the Lead in Global Investment Trends

Wealth Professional | Steve Randall | May 26, 2023

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A recent international study conducted by the CFA Institute and the FINRA Foundation focused on the investment behaviors of Gen Z individuals (aged 18-34) in Canada, the US, UK, and China.

  • The study emphasized the need for governments, regulators, and investment professionals to support Gen Z by providing them with the necessary knowledge and educational tools to make informed investment decisions. It also noted the impact of macroeconomic factors, the rise of cryptocurrency, and the influence of social media "finfluencers" on the investment habits of this cohort.

See:  Early-stage Investing – The Public gets a Seat at the Table

  • The study revealed several key findings:
    • Gen Z Canadians exhibit the highest level of investing activity among the four countries surveyed, with 74% owning at least one investment product. This figure surpasses China (57%), the US (56%), and the UK (49%).
    • The fear of missing out (FOMO) was identified as the primary motivator for 40% of Canadian Gen Z individuals to start investing.
    • Access to financial advice through social media and the availability of investing apps and cryptocurrencies were identified as significant factors influencing investment decisions.
    • Cryptocurrencies served as the starting point for 35% of young Canadian investors, the highest proportion compared to the other countries.
    • The study highlighted that 79% of Gen Z Canadians began investing before the age of 21. However, 56% of non-investors cited a lack of knowledge as the main barrier to investing.
    • While Gen Z Canadians lead in many aspects, their top investing goal aligns with their international peers, with 55% aiming to save for travel or vacations. Interestingly, an equal percentage also cited paying monthly bills as their top concern.

NCFA Jan 2018 resize - Emerging Investors: Gen Z Canadians Take the Lead in Global Investment TrendsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Fintech Fridays EP55: Global Hiring Trends: How Gen Z Talent Thrives

NCFA Canada | Jan 7, 2022

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EP55: Global Hiring Trends:  How Gen Z Talent Thrives

Featured Guest:

ANNE-MARIE FANNON, Director, Work-Learn Institute, University of Waterloo (LinkedIn)

Bio:  Anne-Marie Fannon is the director of the Work-Learn Institute.  In this role, she sets the research and innovation agenda for the Work-Learn team.  Anne-Marie is passionate about leveraging Work-Learn’s research insights to inform the practice and pedagogy of WIL.  For the last ten years, Anne-Marie was director of Work-Integrated Learning Programs at the University of Waterloo. In this role, she oversaw the development and delivery of curriculum that supported students in a variety of work-integrated learning opportunities including the new (WE) Accelerate program, the EDGE program and the WatPD courses.  Anne-Marie is actively engaged with Co-operative Education and Work-Integrated Learning (CEWIL) Canada and serves as co-chair of CEWIL’s Government and External Relations Committee.   She was president of the association in 2016/2017 during which time she led the association through an expansion of its mandate from co-op to work-integrated learning.  To get in touch via email:  Amfannon@uw.ca

About Co-operative and Experiential Education at the University of Waterloo

The future of work is changing. The University of Waterloo’s commitment to the value of work-integrated learning makes it a global leader in co-operative and experiential education. With more than 25,000 co-op students and 7,500 employers in over 60 countries, Waterloo’s co-op program is recognized as one of the pre-eminent institutions in work-integrated learning.

Our talent pool boasts skill sets for all your business needs with thousands of future-ready students, fresh graduates, and alumni available for work.  Tap into bright, entrepreneurial candidates with technical skills, who are also prepared to utilize communication, critical thinking, problem solving and self-assessment in the workplace.  Future-proof your organization and claim your space at the forefront of innovation by hiring Waterloo talent.

About this Episode

On this Season 4 kickoff episode, NCFA Founder Craig Asano sits down with the incredible Anne-Marie Fannon, Director, Work-Learn Institute at the University of Waterloo, to better understand the motivations and needs of the next major human capital resource - Gen Z.  If you're a start-up, scale-up or HR professional seeking intel on an emerging tech savvy, innovative, and talent asset class then this podcast is for you.  Tune in now and learn not just the how but also the why you should be building relationships with Gen Z today.  Enjoy!

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Fintech Friday Transcript of Episode 55:

Anne-Marie Fannon, Director, Work-Learn Institute at the University of Waterloo

Intro: Welcome to fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners. Covering all things fintech, blockchain, AI and alternative finance.

 

Craig Asano: [00:00:00] Hello, everyone, my name is Craig Asano, the founder and CEO of NCFA Canada, welcoming you to season four of Fintech Fridays, which is episode 55. It's a weekly podcast brought to you by NCFA and partners, where we sit down with the incredible people in the fintech and funding community and talk about trends, product innovations, developments and challenges. Today we have very special guests with us, Anne-Marie Fannon, who is the director of the Work Learn Institute at the University of Waterloo, which is the only research unit of its kind. Researching the development of talent through quality work-integrated learning programs. They have done extensive research and attracting, engaging and retaining Gen Z talent, which should be a very interesting topic in discussion today, as well as what it takes for employers to be future ready. Of course, the University of Waterloo is one of Canada's leading research institutions and universities and produces a plethora. And I'm telling you, I'm talking from experience, a plethora of top grads across the board, especially in tech, science, engineering. They also operate a world renowned co-op program with, I believe, twenty or twenty five thousand students enrolled, which is the largest in the world. So I think that's absolutely remarkable.  Anne-Marie we're thrilled that you can join us today to share your knowledge and experience. Thanks so much and welcome to the show.

 

Anne-Marie Fannon: [00:01:28] Thanks so much, Craig. I'm very excited to be here today and to have this conversation.

 

Craig Asano: [00:01:33] Yeah, I think it's a topic that we've certainly not covered here on the show, and I think it's very relevant to many companies who are building in the space. Obviously, sourcing talent and really understanding the motivations and what it's all about is is critical to building a successful product and business. So I'm very excited. So let's get into this. So just to kick things off, a bit of an intro question, maybe you can elaborate a little bit about the work you're doing and tell us a little bit about yourself. How did you get involved at UW and the talent development and experiential learning space?

 

Anne-Marie Fannon: [00:02:15] Yeah, absolutely. So I've been at Waterloo for over 20 years now, but specifically in the work integrated learning space for the last 13 years, and my passion for it grows each and every year. And that's really because it is so easy to see the efficacy of this educational model. So the ways in which our students so quickly develop these critical competencies and the impact that they have on our employers and our community partners, my work for the last ten years was really in the development of new work-integrated learning programs and developing the curriculum that supports students learning during those work-integrated learning experiences, and I've recently moved to the Work Learning Institute, which, as you mentioned, is the world's only research center specifically focused on quality work-integrated learning and school to work transitions. And there really is no better place in the world to be studying work-integrated learning than at the University of Waterloo. I feel incredibly privileged to do this work and to be here today to share a little bit of it with you and your listeners.

 

Craig Asano: [00:03:30] Yeah, everything is about a journey. When you're building something new, you're approaching innovation, the ability to learn and foster something novel and tak it on board and develop it and implement it and nurture it. That's the language of a lot of venture startups. Does it matter actually what sector they're in? And so I think it's it's hand and parcel. It's a perfect fit for our podcast. I'm really pleased that you're here to talk about this.  In the world of of sort of let's just begin off with the workforce and what's going on from a trends perspective and how it's shaping the job market and the world. And just can you explain a little bit what's happening and the trends of the workforce?

 

Anne-Marie Fannon: [00:04:15] Absolutely. So first and foremost, we have to acknowledge COVID and Covid's impacts on the workforce, particularly with respect to considerations of remote work and hybrid work and what this means in terms of access to global talent. So as as everyone has seen, COVID 19 really accelerated the workforce trends that were well underway and pushed us to think about how we are going to respond in a really efficient and thoughtful manner. The work-learned team recently completed a review of the literature of the future of work, and in that we identified six specific workforce trends that again were already underway before COVID, but has accelerated. So the first one is top of mind for many of us. Advances in AI and technology and really at the core, what that means in terms of ensuring that our employees have an appropriate mix of those human and technical skills and how we're going to be able to really quickly respond to technology's impacts on our day to day work. The next trend that emerged is really the increasing need for employees to have skill agility and transferability. So with the rapid changes, the rapid impacts of technology, our day to day work is changing so quickly and that means as employees, we need to know how our skills transfer to different tasks, to different roles and sometimes even to industries as new industries emerge. So how can you take those skills that you learned in school or that you've developed through 10, 15 years of a career in one industry and think about how to leverage them in an entirely new context. The next one is sort of hand in hand with that, and that's the need for all employees to be those lifelong learners, so constantly up-skilling and re-skilling, identifying their own gaps and taking the initiative to fill them.

 

Anne-Marie Fannon: [00:06:35] And of course, this isn't just on the individual worker. This is something where we're going to need solutions at an ecosystem level, both employers and government. But there really will be quite an imperative that each employee really understand what is happening in the world of work and taking the ownership to make sure that they are individually prepared to respond. The fourth trend relates to diverse workplaces. So once again, going back to this idea of global talent and how we might think about an international workforce, but also what it means to tap into the entire labor market and to build inclusive workplaces that support diverse employees. Because we need all of our workers, it's not just a nice to have, it's it's an imperative for all organizations to really be thinking about talent in different ways and much more inclusive ways. The gig economy, of course, continues to grow. So how do we manage this? How do we protect worker rights, create strong employment experiences in a gig economy? And then another trend that is emerging and we'll probably talk about quite a bit later as this gap between employee and organizational values. And I think that's really epitomized by the 'Great Resignation' and organizations needing to think about whether or not they really live their stated values. Are they really encouraging Wellness Work-Life Balance in their employees? And this is top of mind for Gen Z. So not only is it something that employers need to think about for all of their employees, but if they really want to access this emerging talent, they're going to need to change work structures to live those values and understand the values of their employees.

 

Craig Asano: [00:08:49] Wow, that is a lot to take in. I mean, every single one of those five trends, whether it's the tech moving online and, we've seen growth in the gig economy, of course, in all sorts of others. The diversity point, the lifelong learning, the gap in the values like what this is at a time when you have the Great Resignation, yet governments around the world, they need to get their economies back on track, get everyone back to work. So this is the timing of this conversation it's ideal. So in terms of these skills or trends really what or how is Canada doing a good job? Is there one area that we've got it or there's a gap and we need a lot of work, and how do we rank globally? Are we doing a good job or do we need to go back to the drawing board?

 

Anne-Marie Fannon: [00:09:40] Mm-hmm. Yeah, I mean, I think we should be very proud of our educational systems in Canada. Canadian graduates consistently rank in the top five of the world, and we also have a highly educated population with sixty two percent of adults age twenty five to sixty four with post-secondary degrees. So this does mean that Canadian talent is highly sought after, and all employers, especially our domestic employers, really need to think strategically about how to build those workplaces that are going to attract Canadian talent. So this is a problem in many sectors. But as I am sure you know, it's felt very acutely in the tech industry where oftentimes our salaries fail to compete with, say, our American competitors. So not only do our employers need to think about how they're going to attract the talent, but especially how to retain it within their organizations. And as mentioned earlier, and we can get into a little bit later, this really means rethinking what work looks like and ensuring that staff find it meaningful. And for employers, this might mean a lot of individualization of work, and that butts up against many of our existing practices.  But we need to see the value and the specific ways that we can engage each individual employee sort of solve for the individual as I heard someone once say so that we can really build this human capital within our organizations.  In terms of challenges with the Canadian educational system. I think one of the things that's emerging is really making sure that we are indeed imbuing those future ready capabilities in our students. And obviously, I will be an evangelist for work-integrated learning and the ways in which it can help to develop those competencies in our learners because that's what we need them to know that the future of work is going to be volatile, uncertain, complex, ambiguous. They're going to have to shift. It's not, you know, learn and earn as as we had in the past. We're going to have to be constantly evolving. So that's the thing we need to keep our eye on and the Canadian educational system that we build lifelong learning capabilities in our students and think about constant connection between education and work throughout life.

 

Craig Asano: [00:12:22] Yeah, experential. I mean, I look at my own case, although I graduated many years ago. But the co-op experience, that was what it was about and fast forward all those years later, I just can't imagine how the experience has changed so much but for the listeners, you heard it first...you've got 25000 amazing co-op students that absolutely need this experiential education because we've got to close the gaps. There can't be any gaps in what industry is needing. It's evolving very quickly and it really works hand in hand with the leading universities like the University of Waterloo. So if you need a co-op student, connect with with me or we'll connect you on with the experiential co-op department at University of Waterloo. And we're very thankful that NCFA has a partnership with UW, so that's excellent. So. I know we've got a number of questions in the gaps area but let's just divert for a second here to define the workforce. You mean you're developing exponential programs for students and I guess it's Gen Z. I mean, I find it tough to keep track of it. We had millennials now we got Gen Z. Many of us are Gen X and different generations ourselves. So when we're talking about Gen Z and the talent that they represent, can you just describe who exactly are we talking about? What is their life like? Are there stereotypes that shouldn't be out there? Can you describe a little bit about Gen Z?

 

Anne-Marie Fannon: [00:14:04] Absolutely. So as with all of these generation categories, there's some debate about the specific age range of Gen Z, but roughly we're talking about those who were born in the latter half of the nineteen nineties through to the early teens. So really the age range of those that are roughly between nine and twenty four years old. And in terms of their profile, they they tend to be categorized as flexible and adaptable with a real appreciation for diversity. They value their independence, as well as the ability to express and to have their opinions recognized. They're incredibly skilled at multitasking. They are those true digital natives as well. And so one thing that's really interesting about Gen Z is they're really strong at moving between technology and and in person or real experiences. This sort of that fluidity that will work incredibly well for these remote and hybrid work forces. They certainly prioritize financial stability, and they're also seen as highly competitive and entrepreneurial in terms of some specific stereotypes that might emerge from that profile, sometimes we hear that Gen Z has a short attention span that they prioritize, say, hedonism over hard work and that they really do require more flexibility in their work. And I think, well, there's some truth to some of those stereotypes or generalizations. Sometimes that's more us older folks sort of having notions of what effective work looks like or what worker engagement looks like that just don't hold true for this generation, but that in no way shape or form limits their ability to contribute to our organizations in incredible ways. It just means, as we've already talked about, that we need to think about how to bridge that gap.

 

Craig Asano: [00:16:18] So speaking of bridging the gap, we're working with all sorts of start up and scale up companies. They're experiencing right now a resource like a strain of resources and resource allocation, and they're competing across the board. I was just having a conversation with my brother, who's leading a transportation tech company. I think there's 24 developers, and it seems like every week I get on the phone, there's another, talented developer being plucked away for a higher salary and things. So I just the strategies that a company might employ to retain that talent and you know what are some tips and how should an organization, whether they're smaller, nimble and agile startup or, an emerging scale up someone that's closed a few rounds and probably north of 100 employees approaching, two-three-four hundred and even even enterprise. What's the latest thinking?

 

Anne-Marie Fannon: [00:17:20] Mm hmm. Absolutely. So this is something that work-learn has studied extensively. Maybe I will start with recruitment. So how do we attract Gen Z candidates to our organization? And we recently did a study with some of our students to better understand why they would or wouldn't apply to a specific job posting. And the advice for employers is this so job ads need to go beyond tasks, pay and benefits. Those job ads really need to be explicit about the skills that an employee is going to learn. The job ads need to help the employee see the ways in which they'll be able to make a positive impact, and those job ads should articulate the organization's values. And students were even more compelled to apply to a job if it was clear in that ad actually how the employer was going to make these things a reality. You know, Gen Z and this applies, particularly in a work-integrated learning context. They want to know how they're going to be given opportunities to grow and to contribute. And we can talk about this a little bit more. But that really comes down to structuring job tasks differently with a rich balance of, of course, getting the day to day job done, but also really carving out space for those Gen Z ers to innovate, to stretch themselves and to make an impact and that goes oftentimes beyond the job description itself. And then there's there's also some work that we've done in terms of how to motivate Gen Z. So again, they're more likely to be attracted to positions where they enjoy their work, where they have a chance to make a positive impact for the organization, but also for society where they have a strong social network at work. That's really, really important for Gen Z and that they're able to receive recognition for that work and there's some job stability. So instantaneously you might begin to see some gaps between these values and, say, the future of work trends that we just talked about. You know, with the increase in the gig economy and our remote workplaces where we're still trying to figure out how to replicate those social networks. So this is something for us to bear in mind as we think about evolving our organizational structures. It doesn't mean upending everything, but it really does require an understanding of these values of Gen Z and being really thoughtful in how we structure day to day work, how we build social networks and how we recognize and reward the efforts of Gen Z.

 

Craig Asano: [00:20:28] Wow, we've got a challenge, the great resignation, it's not going to be easy to get back to work You can't treat them like a number, right. And I think the larger the organizations are, even though they have an ingrained culture, that's a big challenge because however many hierarchies away from those that are making the ultimate decisions, and I heard instead of the task, you really need to show the value, the road-map, the culture and all the things that would be great to know as you're assessing various employer prospects. And so I think that is a gap. I think that might come out in the interviews and maybe if the due diligence were done by Gen Z or anyone for that matter looking for new job, they they might have an opportunity to talk to, another employee and just an employee, an employee and compare notes. So I think it's fascinating. So from an organizational perspective, we're working with a lot of innovation sectors and that's everything from all the new technologies and how they apply to various use cases and sectors. It's not always the, finance apps, let's say, but are there certain roles and there are certain opportunities that would be best matched with Gen Z's capacity to innovate? Do you think there's a good fit there?

 

Anne-Marie Fannon: [00:22:00] Yeah, great question. And I think it's really important for us to emphasize that youth, so our Gen Z right now have specific traits that make them uniquely innovative, and some of that has to do with the stage that they're at in their lives. And even with their their neural, their brain development. And so I don't think it's it's limited to specific roles. But I do think what all organizations need to do as they bring Gen Z talent into their companies is to think again about creating the space and the structures that allow and empower Gen Z to innovate. So this is drawing upon some of the work of our colleagues at Waterloo, Amilia Clarke and Ilona Dougherty. They study youth and innovation, and they've found that, among other things, some of the really strong traits that you would see in Gen Z. So youth, as we might remember, are still visionaries. They're they're still able to dream big and believe in the art of the possible. They're at their neurobiological peak of creative thinking, and they are just not as bound by social rules and hierarchy. There are also experimenters who are curious, and they're really, as I said, willing to challenge the status quo. So in order to capitalize on this, employers need to first give space and flexibility for that innovation to occur. And so again, maybe it's one of those models that we hear about with the 10 percent of the work time on an innovation project or a stretch project for that employee. Maybe it's not something that is mission critical, but that could have a significant impact on the organization's bottom line. And that can be really inspirational for a Gen Z to be able to contribute in that kind of meaningful way. But most importantly and fundamentally, it actually requires a willingness on the part of the employer, the supervisor, the organization to hear, to listen to the ideas, to be open to the questions and the potential criticisms that would come from our Gen Z talent and to empower them to bring forward their questions and their ideas.

 

Craig Asano: [00:24:38]  So I'm hearing we need new organizational structures, we need to do this idea of space. We're not talking physical space. They need room in a road-map for growth and one thing that I guess I can tackle it through a question, a couple of different perspectives but maybe the thing that popped into my mind that our listeners might be thinking about is that organizations, they're not all filled with Gen Z employees. So, the founders might be a little bit older (they might be young too).  How can Gen Z with these new organizational structures...so I sort of have a two pronged question comparing and contrasting with maybe some of the organizational structures of a startup or scale up compared to what the ideal Gen Z organizational structure might be but then what is the impact on everyone else because we might have some older employees in there as well, and they're providing a different experience and they're collectively as a team, building and innovating products and commercializing them to market. Yeah. Any thoughts on that?

 

Anne-Marie Fannon: [00:25:50] Yeah, absolutely. And I, you know, it is one of those things where particularly as we think about Gen Z or, you know, early talent, early employees, yes, it means that some changes to organizational structures are necessary. But I don't think it means that sort of complete upheaval that changes how you and I do work. So maybe I'll sort of put a little bit more specificity on that point and then talk about how it how those changes might interact with other generations. So, you know, for organizations to really maximize engagement at work from a Gen Z perspective, as we've always already talked about, it really is giving that space for innovation and for skill development but oftentimes those things already exist in our roles. What we need to do for Gen Z is make it really explicit. So learning has always been closely integrated with work. The two are inextricable, but what can be really helpful for young talent is for them to have their attention drawn to those explicit learning opportunities. We're doing this project or we're doing this training, and here's why we're doing it, and here's how it's going to help you. And so it's it's not necessarily saying, Oh, the way that we've been doing work for the last 50 years is wrong. And this is, I don't even think Gen Z specific. It's just youth specific and really making a few more intentional efforts to, as you've already said, show them that career road-map, show them the impact and being a little bit more open to what might be seen as criticisms of why do we do this process this way? So maybe just want to temper that a little bit that I don't think it means we don't know how to create effective organizations for our employees or for our youth, just that it can be really helpful for all of us to think about how we are developing our skills and then that's kind of a best practice across the board.  And then in terms of sort of the impact on other generations, and I'm going to maybe draw upon just work-integrated learning.  Specifically, I think that's where the magic happens, when you can create a little bit of that space and where youth can be seen as mentors and mentees to their colleagues. So, you know, oftentimes the new graduate or the work integrated learning student is going to be bringing some of the newest ideas in their field. Or they they are those digital natives. They've got that technology in hand and so they can mentor their colleagues at the same time that they are learning from their colleagues about their own career journeys. And, you know, the the best practices in the organization and the best practices for finding fulfillment in work and work life balance. So I don't see it....we talk about generational sort of pushes against one another. I think what the magic of work-integrated learning is that when you bring someone with these fresh perspectives into your organization. And you're really willing to listen. There can be this beautiful collaboration that happens and that challenges you to really see things through their eyes and evolve your organization accordingly.

 

Craig Asano: [00:29:55] I love it. Drop all those stereotypes and just collaborate and get the best that everyone can offer. And that's the whole workplace, the whole thing. Let's move on and widen the lens a little bit from Gen Z and talk about the global hiring future because we're seeing and we have heard for decades but I think now it's here, there might be some concern about job loss through automation trends, autonomous workers and robots as not just employees, they're also customers now, as we've learned through some of our metaverse contacts. And what is the impact of the the raw automation and autonomous workforce future look like?

 

Anne-Marie Fannon: [00:30:52] Mm hmm. Right. So it's such an interesting question, isn't it? And particularly, as you've just said, as we really start to see it play out in organizations in response to the pandemic and labour shortages, we've already seen that the technology is here and it's advancing quickly. On the other hand, I don't think it's quite meeting the predictions about the speed to which it would disrupt broadly disrupt as many roles or industries. Nevertheless, I believe that the cautions about the impact of AI and robots are true, and those cautions are really that we need to think differently about how we train our workers, and as I've already shared, how we develop the lifelong learning skills that are going to be so critical for their continuous development and employability. Because, as has always been, the case, technology can help us tremendously with productivity. And even though this means our jobs will change and yes, some jobs will be lost, this isn't necessarily a bad thing, if we can find ways to upskill our existing workforce to allow them to make more meaningful contributions using those uniquely human skills. So with with respect to AI and robots, this is of course going to be particularly important with low wage earners who are always vulnerable but many of the predictions with respect to AI and machine learning are noting that knowledge workers are going to be quite vulnerable as well, and vulnerable is probably not the right word, that many knowledge workers are going to have their jobs dramatically changed as a result of AI, and that doesn't have to be a bad thing. It can make our jobs easier, remove those mundane tasks and and even increase demand or availability for services. But we do need to ensure that we are building the structures where when the technology comes in and you have those dedicated employees that have spent their careers with your organizations that we are there to help them evolve their work accordingly, and that's the key thing.  And that's what we're hearing from industry as they start to think about how to do their training differently right now before the technology has come in and completely removed 80 percent of someone's job. How do we train our workers, not in a technology, not on a specific skill, but very holistically to take the initiative to learn the human skills that are going to let them take that specific area and do more meaningful work in it because the technology has helped to remove those sort of rote or routine tasks.

 

Craig Asano: [00:34:02]  look at the supermarket checkout, I never go in the line, I check myself out. It's the DIY checkouter every time, you know.  So you touched upon skills and I can only think like about being future ready and I've got two kids trying to raise them the best we can and regardless of age, young or old, like, what are the skills that are required to be ready for these global changes in automation that is happening? What are the core skills?

 

Anne-Marie Fannon: [00:34:35] Yeah, absolutely. So this is something that we've studied extensively at Waterloo as well, and we've developed what we call our future ready talent framework to provide our students with guidance on what those skills are going to be and how they can specifically develop them. So the Future Ready Talent framework consists of 12 competencies that are divided into four sort of clusters or buckets. And first, we have this idea of expanding and transferring expertise. So that includes competencies like the domain or technical skills that you need to do your day to day job. But it also includes technological agility. So the ability to not just learn specific software, but to be really comfortable with technology and to be an advocate for technology. And it also includes information and data literacy as something that's going to be core in just about every job in every industry. And then we also have a category that is really about developing self. And this is kind of how I think the future ready talent framework differs from some existing competency frameworks because it focuses on self-management, so resilience and emotional intelligence, and it focuses on self-assessment, really understanding where your strengths are and also what areas you have for development as an employee and as a human in this world. And then the third competency in this bucket is lifelong learning and career development. And again, that idea that we are all going to have to take responsibility for managing our own careers and making sure that we're staying abreast of the changes within our field.  The third category in our future ready talent framework is one that has always been critical for work and you'll probably find in any competency framework. So we have communication, we have collaboration and then we have intercultural effectiveness and understanding what it means to work within a global workforce. And then the last category is really design and deliver solutions. All of these previous competencies are absolutely critical, but we have to be able to take them and move from concept to execution. So in that category, we have an innovation mindset, we have critical thinking and then we have implementation. And I what I absolutely love about the future ready talent framework is that these competencies span all domains, all careers, and they really do think about the evolution of the human and how we can sort of be using this framework even as myself. What am I doing to improve my critical thinking skills these days? And how does that align with my day to day work? What does it really mean for me? And so I think as our learners move through their work-integrated learning experiences and really start to understand what these competencies are and how they're developing them. This gives them the resilience, the adaptability to navigate these, this rapidly changing future of work.

 

Craig Asano: [00:38:06] That is a ton to absorb. I'm also conscious at the time, I'm trying to keep us on track here, but I love what I'm hearing. I'm learning a ton and it's certainly a different type of conversation than we've been having here on Friday's podcast, so the last question before we get into our, you know, every, every podcast, we try to do that I'm hosting anyway, try to do some rapid fire questions. But the last question is just the trends in education and is there any intel to pluck from your immense knowledge base and experience in what's happening. Are we missing any pieces here with regards to preparing not just our future workforce, but ourselves for for the future from an educational perspective?

 

Anne-Marie Fannon: [00:39:00] Mm hmm. Mm hmm. Yeah, thanks so much. It might not surprise you that I want to talk a little bit about work-integrated learning, so it's certainly not new, but we're seeing such huge interest in it these days. And I think again, it really does boil down to its effectiveness as an educational model to meet the changing needs of industry and society. And so that's what I see happening in a work integrated learning space. I mean, if you look at the co-op model, it's been around a Waterloo for over 60 years and in some ways there's some really cool stuff about it that is, you know, preparing students for a gig economy. You work for four months, you go to school for four months and you try out different industries in different organizations. But one of the things that I see happening in the educational space is just this continued partnership between industry and education and thinking about what those connections look like in a different way. And so that could mean an educational institution working really closely with a specific employer or with an industry association to really better understand what is happening out there and to co-create programming, to adapt programming to meet those needs. That's what's super exciting to me about what's happening in the Canadian educational context. I think the kind of the walls of the ivory tower are coming down in and certainly in work-integrated learning there's real interest in understanding how we need to evolve as educational institutions to meet the needs of industry, but then more broadly as society.

 

Craig Asano: [00:40:52] I'd absolutely love to figure out how NCFA and our partnership with UW can really take it to the next level and figure out how can we implement that innovation to get whole capacity, and I think it's very exciting. I don't have all the answers, and I certainly did come up through that more traditional co-op program, which was great but I think we're at a period in sort of the journey of education and people can get access to things immediately but yet from a skills perspective, they need so much more to be future ready. So I'm certainly excited to take that conversation forward another time but this brings us to the my favourite part of the discussion, although I've really enjoyed the entire dialogue today is the rapid fire questions. So I'm going to ask five short questions, and we're looking for short answers and rapid questions and answers. You ready for that?

 

Anne-Marie Fannon: [00:41:57] Ready.

 

Craig Asano: [00:41:58] Ok, let's do it. And then we'll we'll wrap things here. So number one, what is your favorite Christmas cookie?

 

Anne-Marie Fannon: [00:42:05] Ginger snaps.

 

Craig Asano: [00:42:07] Oh, I love those. Number two, what is one piece of advice you'd give yourself if you went back in time to when you were a university student?

 

Anne-Marie Fannon: [00:42:17] Yeah, stop worrying so much.

 

Craig Asano: [00:42:19] Let it happen, right? Ok. Number three, what motivates you each and every day?

 

Anne-Marie Fannon: [00:42:25] Absolutely. I am in love with my work and I just feel so lucky to get to do it.

 

Craig Asano: [00:42:31] Love the passion. So number four, what's your favourite holiday destination, whether it's a city or country?

 

Anne-Marie Fannon: [00:42:38] Anywhere in the Caribbean.

 

Craig Asano: [00:42:40] Nice. I don't know if you're going to be getting there this year, though. Last rapid-fire question what's one thing Canadians can do to make the world a better place?

 

Anne-Marie Fannon: [00:42:52] Yeah, I think we are so, so fortunate and as Canadians, we need to know what is happening in this world. I think the UN SDGs are a great thing for us to be focusing on and to really extend our internal domestic capacity for the betterment of the world. So learn the SDGs, know what they mean and think about that global workforce.

 

Craig Asano: [00:43:22] Amazing. So just in closing here, Anne-Marie, how can listeners anyone who to the podcast get in touch with you if they have any follow up questions, they'd like to learn more or they'd like to, you know, integrative work, learning, or they'd like to hire some students? How do they get in touch with you?

 

Anne-Marie Fannon: [00:43:40] Oh, absolutely great questions. So they can look us up online at the Work-Learn Institute. They can send me an email directly. Amfannon@uw.ca would love to hear from the listeners and to explore some collaborations.

 

Craig Asano: [00:43:58] Absolutely. So with that in mind, thank so much, Anne-Marie, for sharing your valuable time, knowledge and expertise with us. It was an absolute pleasure. I learned a ton. And you're welcome back absolutely any time.

 

Anne-Marie Fannon: [00:44:11] Thank you so much, Craig. It was a blast…

 

Craig Asano: [00:44:19] Perfect. Thank you very much. So if you're new to Fintech Fridays, please check out some of the incredible past episodes on the site. You'll be surprised, I think, with what you'll find. We look forward to seeing you next Friday for another episode of Fintech Fridays. Have a great weekend, everyone.

 

Outro : you've been listening to Fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and Fintech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit ncfacanada.org. Oh yeah.

 

End of Podcast

 

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NCFA Jan 2018 resize - Fintech Fridays EP55: Global Hiring Trends:  How Gen Z Talent Thrives The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Gen Z VCs are entrepreneurial, digitally native, values-focused

AngelList | Matthew Speiser | Oct 8, 2021

Gen Z are becoming VCs - Gen Z VCs are entrepreneurial, digitally native, values-focused

“The barriers to entrepreneurship and investing have never been lower, and our generation is very aware of the opportunity we have.”

See:  Why is venture capital still ignoring women? The case for investing is clear.

Gen Z has become the target market for many new businesses—and founders and venture firms want to work with them. Hence the rise of Gen Z VCs, an online community where young investors swap knowledge and deal flow. Gen Z VCs has grown to 10k members since launching in November 2020.

“Gen Z is unique in that we’re entrepreneurial, digitally native, values-focused, and we don’t accept the status quo,”

said Meagan Loyst, the 24-year-old founder of Gen Z VCs and an early-stage investor at Lerer Hippeau.

Leveraging Personal Brands

“More so than previous generations, Gen Zers are really great at building their brand, and that’s something that’s helped me a lot personally,” said Chang. “The whole pre-seed and seed space is about who you know, and if founders know you because of your brand, it can go a long way towards earning an allocation.”

“I think we owe some of our success to the fact that more founders are coming from Gen Z, and they don’t often get to speak to someone who’s their peer during the fundraising process,” said Doherty. “Founders want people their own age on the cap table because we share a similar worldview.”

Lowered Barriers to Entry

Young investors like Loyst, Chang, and Doherty have benefitted from new technologies and financial tools that make it easier to launch startups and funds, as well as a greater democratization of investing knowledge brought on by the internet.

See:  Value investing is struggling to remain relevant

Another big positive development for Gen Z VCs has been new SEC rules adopted last year that increase access to private investments. The rule changes allow more investors to participate in private offerings by adding new categories of individuals who may qualify as accredited investors based on their professional knowledge, experience, or certifications.

Gen Zers have utilized these rules to spin up their own funds and invest in their friends’ businesses and funds. Ryan Li, an angel investor and junior at Stanford University, said his classmates are taking the Series 63 exam to earn accredited investor status. Some have also used their crypto fortunes to meet the wealth requirements.

“We’re young in our careers and we have the opportunity to be bold and take some risks,” said Li.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Gen Z VCs are entrepreneurial, digitally native, values-focused The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Gen Z: the end of status quo banking?

WALO | Rim Charkani | Aug 31, 2021

WALO financial education - Gen Z: the end of status quo banking?Canadians are notoriously loyal to their financial institution (FI). Only 3% of them jump ship every year because switching costs act as a silent yet strong deterrent in banking. Imagine having to transfer all your recurring payments and deposits to a new chequing account. Fears of complications set in, and you resign yourself to the status quo.

While family and friends are still determining factors when choosing a lifelong financial service provider, relying on a history of apathy simply will not cut it nowadays. Establishing a meaningful relationship based on true added value is thus critical for FIs to capture and retain Generation Z's attention.

SAME SAME, BUT DIFFERENT

In some ways, Gen Z is no different than previous cohorts. They want their money to be safe and make better financial decisions. Surprisingly, they also value things like branch proximity and greater trust levels associated with well-established FIs.

Yet, Gen Z members are a different breed evolving in new technological times. Word of mouth defines brand adoption for products that need to be social, digital, educational, and offer value over time. If a relevant added value is not there, this tech-savvy, mobile-first generation will go somewhere else.

A GAP TO BE FILLED

Current technological shifts have created a void - some Gen Zers get cell phones before 10 years old and are active on social media by the time they are 12. Yet, a lot of them do not have payment cards or bank accounts until they are 18.

See:  Fintech Startup WALO Goes Live With A Gamified Financial Literacy App for Kids and Parents

That does not mean that teens will abstain from mobile banking during those years. It just means that, in an era where hard cash is no longer king and online shopping is a must, traditional banking methods have failed them.

CONNECT EARLY

Financial habits are set as early as seven years old, which often coincides when parents start giving an allowance. Remarkably, a lot of big banks have overlooked the impact Gen Z will have on their line of business. If FIs do not connect during this current window of opportunity, someone else will.

“As fintech and big tech players expand their payment functionality, banks will need to be invested in teen banking — or risk being left behind.” Morgan Stanley Research

In Canada, we can just look to Europe for a glimpse into the future. Open banking, neobanks, consumer-friendly legislation and services like the UK's Current Account Switch Service will eventually come to Canada.

And if there is one lesson to be learned, it is that embracing those changes is crucial. FIs who were adequately prepared are thriving in this new environment. By doing nothing, Canada is at risk of becoming a net importer of financial technology for teens.

BE RELEVANT

In the end, it all comes down to being relevant for tomorrow’s mass customers, Generation Z, right NOW.

Gen Z’s appetite for new payment products and experiences is a no-brainer. There are clear signs that their demands for alternative cashless, context-relevant and rewarding mobile experiences are unmet.

This technologically savvy cohort represents a massive opportunity for FIs willing to provide products tailored to their needs. Those FIs looking for ways to drive meaningful mobile engagement for Gen Z can rely on Fintechs such as WALO.

An early value-added relationship between the youth and FIs will pave the way for loyal and lucrative lifelong relationships.

 

Learn more about Rim and the WALO mission on NCFA's Fintech Fridays podcast:


NCFA Jan 2018 resize - Gen Z: the end of status quo banking? The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Credit Reference Agencies Are Coming For Your Data

Data Insights | Jun 3, 2024

Freepik Rawpixel.com Credit reporting agency - Credit Reference Agencies Are Coming For Your Data

Image: Freepik/Rawpixel.com

Credit Reference Agencies Are Monetizing Data Services Beyond Credit Reporting

Consumer credit information is gathered and maintained by credit reference agencies (CRAs) such as major players TransUnion, Experian, and Equifax. To generate credit reports, they gather information from multiple sources, such as financial institutions, public records, and direct customer input. Lenders, insurers, employers, and other organizations can use these reports to evaluate a person's creditworthiness, risk profile, and financial history.

See:  2023 Data Privacy in North America – Year in Review

The gathering and reporting of credit information is still the primary duty of CRAs. Nonetheless, their operations now cover a far wider ground. The focus on marketing services and data analytics represents a change from just giving credit scores to delivering all-inclusive data solutions. The application of cutting-edge technologies and the growing importance of data insights differentiate modern credit reporting methods from traditional approaches.  In order to more precisely target customers, data marketing services make use of the enormous amount of data that is gathered by CRAs and other sources. To segment markets, forecast consumer behaviour, and customize marketing campaigns, they examine and make use of this data.

Trends and Insights

1.  Credit reporting agencies (CRAs) now offer data marketing and advanced analytic services, which goes well beyond standard credit reporting. This development is in line with a larger trend in data monetization, which uses customer data to create new sources of income.

2.  CRAs' prediction power has been greatly increased by the combination of artificial intelligence (AI) and machine learning (ML). Personalized marketing plans and more precise risk evaluations are made possible by these technologies.

3.  People are becoming more conscious of the ways in which their personal information is gathered, utilized, and sold. Calls for increased transparency and control over personal data are heightened by privacy concerns.

4.  To address these growing privacy gaps, regulatory frameworks are changing. Stricter guidelines on data collection and use are imposed by laws such as the California Consumer Privacy Act (CCPA) in the US and the General Data Protection Regulation (GDPR) in Europe.

See: 

Insurance Industry Sitting on Treasure Trove of Big Data, As Regulators Wrestle Data Privacy

Primer on Quebec’s New Data Portability Law

Which Way Are These Businesses Heading?

  • CRAs will likely continue extending their services into new markets and developing nations, providing solutions that are specifically suited to the demands and legal frameworks of those regions.
  • Businesses are spending money on platforms that provide customers greater control over their data and improved access to their credit information. This includes individualized financial guidance and instructional materials.
  • CRAs are now able to incorporate their data solutions into cutting-edge financial products and services because of growing partnerships with financial technology firms.

What Could Go Wrong?

  • Customers may experience incorrect credit denials or increased interest rates as a result of inaccurate or out-of-date information.
  • Consumer trust can be severely damaged by major privacy violations resulting from unauthorized access to or exploitation of consumer data.
  • Serious fines and legal ramifications may arise from non-compliance and disregarding the constantly changing data protection standards.

Regulation

Regulators globally are examining CRAs and their data marketing services more closely, and are continually adapting privacy rules to protection participants, such as (to name just a few):

See:  Protecting Financial Privacy in the Digital Age: Crafting a Stronger Framework

The objectives of these legislation are to safeguard customer privacy, regulate data veracity, and establish interoperable standards. For companies to remain compliant and preserve customer confidence, they need to stay on top of regulatory developments.

Closing Outlook

Innovation is a bit like water, such that it will always find a way to trickle down. As more data is amassed and integrated with advanced analytics, AI, and ML, more sophisticated products that improve credit scoring, risk assessment, and individualized financial services will ultimately create a more agile and responsive financial ecosystem.  There will be significant opportunities for fintechs to compete directly with CRAs or establish varied partnerships.

See:  How Data And Technology Consulting Can Transform The Financial Sector

Consumers will have improved access to their financial information, allowing them to make better decisions and receive tailored financial guidance.  Increased transparency and data accuracy can lead to more equitable credit evaluations, however there are privacy concerns and risk of data breaches which requires balanced privacy protections and regulatory monitoring. The future of CRAs must strike the balance between innovation and ethical data practices.  The successful integration of CRAs into the fintech ecosystem can drive financial inclusion and spur innovation.


NCFA Jan 2018 resize - Credit Reference Agencies Are Coming For Your DataThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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