How financial companies are to survive in the jungle of overflowing information
Ju Young-jin
A rapid overflow of unguaranteed information is what the MZ Generation ― a name referring to the millennials and Gen z ― is facing every day, every second. Born and raised during an era with improved standards of living and easy access to smartphones and technology, the MZ Generation has come to be very intimate with information of all types, especially online. The function of the internet is as if a double-edged sword. Social networking platforms like Twitter, Instagram, Facebook and YouTube have enabled users to share and pick up a great deal of fresh and rare information in a short time without putting much effort into it. On the other side, however, easily obtained information is most likely to be unfiltered and unprocessed, and lacking experts' verification.
Over a couple of years, finance has become a hot topic among the young generation particularly in Korea ever since real estate prices have skyrocketed. A lot of social media influencers that create materials about finance have rapidly gained followers and subscribers, and thus a dozen millions of raw information come and go every day. Although some may benefit from the accessibility of advice and insights of others, consequences come after. As proof of such problems, one severe social issue that has heated the air in Korea is the “bittoo.”
A significant reason behind this issue is the lack of proper financial education. While the prevalence of digital banking has formed the basis for the IT-friendly MZ Generation to become the leading consumers of financial businesses, the consumers are prone to obtaining wrong and inaccurate information, although they have at the same time been ferociously and recklessly investing in financial sectors like stocks and cryptocurrency. According to reports provided by Gallup Korea and Financial Services Commission in 2019, most young investors are found to be lacking practical education on finance and its risks. Over 90 percent of surveyed MZ Generation members aged from 19 to 39 answered that they have never been educated in finance and investment. Moreover, over half of those surveyed responded of having no certainty in their financial knowledge. In other words, many investors are unable to sort out relevant information from ones that are not, which easily leads to unstable and risky investing. The devastating result shows that a great number of MZ investors have pushed through their thresholds in buying and selling stocks and cryptocurrency, relying on unconfirmed information online.
Following the status quo, financial companies must first and foremost work to provide reliable and reputable finance education to their users and potential consumers. Recently, a commercial bank in Korea announced to educate university students on proper investing strategies. The company has introduced seminars and programs that aim to inform finance newbies of the possible dangers of investing and assist in forming a sound sense of value on how to invest. Likewise, compulsory education on Finance A to Z prior to opening an investment account would be a practically effective method for financial companies to manage their consumers' performance in the market. Holding briefing sessions and seminars on a regular basis would also contribute to creating an improved and healthy environment for investment.
Today multiple financial companies are competing in the same market. The more information people are exposed to, the easier it is for companies to either gain or lose consumers. Potential users are able to change banks according to their interests and needs without much difficulty. Such a structure makes securing customers an important goal of financial businesses. In order to stand out and get a firm hold of consumers, enterprises must look to maintain accessibility, reliability and also convenience at their best condition in reputation.
Therefore, after evaluating the finance-related trend among the MZ Generation, the next given assignment to financial companies is to come up with possible solutions to resolving reckless and uneducated investment such as regular and proper education. Moreover, they must take advantage of the fertile land of information to promote their businesses' reputation, reliability and maintainability. The smart and successful adaptation of such new systems is expected to better overall finance and in the long term, the economy of South Korea.
Ju Young-jin is a student at Yonsei University.