Generational Finances in Hong Kong: A Blend of Tradition and Innovation
In this article, we explore the key insights into the financial behaviors and preferences of different age groups and discuss the business implications for financial services providers in Hong Kong.
1. Channels: Embracing Digital, Yet Valuing Physical Presence
Contrary to the assumption that younger consumers solely prefer digital banking, our research reveals that both younger and older consumers exhibit a balanced attitude towards visiting bank or insurer branches. Approximately 50% of consumers across all age groups reported indifference to branch visits. This underscores the importance for banks and insurers to maintain a physical presence while integrating digital tools and efficient service models to enhance customer experiences.
2. Borrowing & Saving: Aversion to Borrowing, Targeted Saving
Saving up in advance is a common preference across generations in Hong Kong. However, the younger Gen Z (18-24) stands out for their inclination to save for specific purposes, as opposed to the less targeted saving habits of older age groups. This insight presents an opportunity for financial institutions to offer tailored savings products that cater to the specific needs and aspirations of different age groups.
3. Risk Appetite: A Generational Divide
There exists a clear generational divide in risk tolerance among Hong Kong consumers. Gen Z, known for their adventurous spirit, exhibits a higher willingness to take financial risks compared to their older counterparts. As individuals age, their risk appetite tends to decrease. Financial service providers should consider this divide when designing investment products and strategies.
4. Investment Preferences: Alternative Investments Gain Traction
Gen Z demonstrates a distinct preference for alternative investments such as cryptocurrencies and NFTs, unlike older age groups. This highlights the importance for financial institutions to diversify their investment product portfolios to cater to the evolving interests and preferences of different generations. Balancing traditional investment options with emerging trends can help meet the demands of a diverse customer base.
5. Health & Medical Insurance: Awareness and Customization
While ownership of health and medical insurance is notably lower among Gen Z, they are more inclined to take personal loans for medical expenses compared to their older counterparts. This calls for insurance companies to increase awareness and education about the importance of health and medical insurance among younger adults. Additionally, designing insurance products that align with the lifestyle and preferences of younger generations, possibly bundled with personal loan products, could be an effective strategy.
Business Implications for Financial Services Providers in Hong Kong
Based on the insights gathered, financial services providers in Hong Kong should consider the following strategies:
- Branch Strategy: Embrace the digital transformation while maintaining a physical presence. Integrating digital tools and efficient service models in branches can enhance the customer experience.
- Digital Innovation: Develop and promote digital and mobile solutions that cater to the tech-savvy younger generation, while ensuring usability and support for older customers who may be less tech-inclined.
- Credit & Savings Products: Offer products that encourage saving and provide low-cost credit options to appeal to the general preference for saving over borrowing.
- Tailored Investment Offerings: Diversify investment product portfolios to cater to the traditional preferences of older investors, as well as the emerging interests of Gen Z in alternative investments.
- Insurance Marketing & Product Design: Increase awareness and education about the importance of health and medical insurance among Gen Z. Design insurance products that align with the lifestyle and preferences of younger adults, possibly bundled with personal loan products for medical expenses.
In conclusion, understanding the nuanced financial behaviors and preferences of different generations is crucial for financial services providers in Hong Kong. By embracing both tradition and innovation, businesses can effectively serve the diverse needs of their customers and stay ahead in this dynamic market.
About this study
The Financial Services Survey (FSS) is a comprehensive and robust source of insights into financial services and products in Hong Kong. It is a syndicated survey that leverages Ipsos’ data-collection capabilities, unparalleled expertise in the financial-services sector, and in-depth knowledge of people, markets and society.
The FSS covers a range of financial services and products: Saving and retirement products; Investment products; Credit cards; Mortgage; Loans; Insurance; Virtual banks; Digital payments; Internet banking Data is captured on usage/ ownership incidence, providers’ awareness, P6M acquisitions, tenure, type of products, providers, acquisition channel, NPS on current providers for each respective service/ product.
The survey also delves into consumers’ personal values and attitudes towards money and includes ‘hot topic’ relevant to the industry every wave.
Frequency: 2 waves per year in April and October.
Samples: 1,000 interviews per wave among the aged 18-64 adult population in Hong Kong – a large sample size to ensure representativity, depth and robustness. 300 booster samples per wave for Gen Z (aged 18-25) and Mass Affluents (liquid assets of HK$1 million+) segments. Interlocking quotas on age and gender.
Data Collection: Online self-completion with Ipsos access panel.
