Born after 2010, Generation Alpha is the youngest consumer segment, the oldest of them being only twelve years of age. Companies are beginning to pay attention to this cohort and, in particular, we are starting to see financial products being developed targeting this generation. Chore-setting app BusyKid allows Gen Alpha to buy fractional shares in their favourite companies, including Amazon, Apple, Disney, Meta, and Google. It allows users to donate to charity as well as to invest their pocket money in the stock market. Bankaroo is a virtual bank for kids, where you can teach them about the value of money in a safe environment. Kids are taught how to budget, save and spend responsibly using the Bankaroo app and website. They can also earn badges by engaging with the app and performing tasks such as creating and completing financial goals.
Why is it important?
It appears that parents are now choosing to give children control over and knowledge about money at a relatively young age. Critics argue that children should be left to be children longer but there are some psychologists who advise that we allow children to deal with their own money as early as possible. “Children need to learn from a very early age that money is not a scary concept,” said Debra Kaplan, Arizona-based therapist and author. “And the more they know about it, the more they can feel a kind of mastery over it.” Teaching financial literacy and responsibility from a young age, arguably sets children up for better financial success when they are adults.
What can businesses do about it?
According to consulting agency McCrindle’s latest report, by 2025 this generation will number more than two billion – the largest generation in history. Businesses should not underestimate this consumer segment. They should seek to understand their unique needs and design products and services accordingly. Gen Alpha kids are raised on screens, so tech-enabled solutions to problems they have are advisable. There are many start-ups innovating in this space and large financial service providers should be creative in their approach to this cohort. They represent an opportunity to reach new customers at a much earlier age than in the past.
By Faeeza Khan
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