Spending, saving and investing are shifting, along with significant growth in adoption of peer-to-peer payments (P2P) and buy now, pay later (BNPL) among Millennials and Gen X
According to the new Future of Money Study from Logica Research released, American financial behaviors have dramatically changed over the past year, with significant and ongoing shifts in work and retirement plans, in payment and purchasing behaviors, and in saving and investing. Some of the most significant changes have to do with increased usage of payment apps, peer-to-peer payments and BNPL options.
“We’ve conducted many waves of this study over the past few years, and never before have we seen this level of acceleration when it comes to changing financial behaviors,” said Lilah Raynor, founder and CEO of Logica Research. “During the height of COVID-19, we found distinct and critical shifts in how people are working, spending, saving and investing, and this latest wave shows that many of those shifts are here to stay. Financial brands and fintech companies will now need to adapt to meet customers where they are now.”
This new wave of the Future of Money study explores the longevity of behaviors that began in response to COVID-19, and its impact on how people work, pay for purchases, save and invest for the future, and also how they want to engage with their financial institutions. Some key findings include:
-
Work: Of those still working, 36% are working more hours (compared to 13% at this time last year). The number of people planning on taking early retirement (9%) and those postponing retirement (33%) are trending up due to the pandemic.
-
Pay: When it comes to online purchases, more Americans use their mobile, especially women (57%) and Millennials (70%). Also the study found that nearly one in three Americans are using P2P more now than before the onset of the pandemic, and BNPL and installment plans have grown significantly over the past year among Gen Z (22% say they are using more, compared to 15% in Spring 2020), Millennials (27% are saying they are using more, compared to 12% in Spring 2020), and Gen X (24% say they are using more, compared to 9% in Spring 2020).
-
Save and Invest: Americans have been able to save more over the past year, and are likely to invest more. Sixteen percent are putting money into the stock market more than before the onset of the pandemic (compared to 10% one year ago) and 13% of Americans own cryptocurrency, with 47% planning to own it in the next five years.
-
Brand Engagement: Americans are turning to financial institutions for support, with many speaking with financial advisors more often. Preferences surrounding delivery of financial advice are evenly divided with just over a quarter wanting digital tools (28%), over a third wanting to talk to a person (39%) and a third desiring a combination of both (33%).
