India’s Gen Z is demonstrating a rising financial awareness, reveals a recent survey by IIM Udaipur of 150 undergraduates and early-career professionals. Most respondents were from middle-income households, with 84% saving regularly and 60% maintaining emergency funds. Investment patterns are varied, while digital engagement is high, with widespread use of mobile banking, UPI, and fintech services. Gen Z increasingly relies on social media influencers for guidance, highlighting gaps between awareness and action.
Policymakers, regulators, and financial institutions must focus on trust, education, and empowerment, supporting this generation’s cautious yet active approach to finance, which is shaping financial behaviours of households, peers, and markets.
In May, IIM Udaipur conducted a survey of nearly 150 undergraduates and early-career professionals from across major Indian states. The findings shed light on Gen Z’s evolving financial mind-set, revealing trends that are both encouraging and insightful. The respondents largely came from middle-income households, with 62% reporting an annual family income of more than ₹1.5 million.
Far from being financially disengaged, India’s Gen Z is proving to be financially emergent—practicing caution, experimenting with new approaches, and actively shaping their relationship with money in ways that could significantly influence the nation’s financial landscape.
Most participants were still students or in the early stages of their careers, with only about 30% reporting personal income. Even so, financial discipline is already visible. A striking 84% save regularly, while 60% have set aside emergency funds covering at least three months of expenses. These formative habits reflect an increasing awareness of financial discipline and the need to prepare for risks.
Investment behaviour is less uniform. About 28% of respondents invest 10–25% of their annual income, while 22% invest even more. At the same time, 20% do not invest at all, and 11% are unsure of their investment levels. This points to gaps not in intent but in financial literacy and structure. Nearly 36% also reported feeling stressed when handling money matters.
As a digital-native generation, their financial engagement strongly reflects this identity. More than 90% use mobile banking apps, and 84% rely on UPI for daily transactions. Nearly two-thirds hold demat accounts, with many actively trading on online platforms. Awareness of fintech offerings such as ‘Buy Now, Pay Later’ services and robo-advisories exceeds 70%, though actual adoption remains relatively cautious.
Their concerns are multifaceted. Despite being tech-savvy, 55% of respondents cited data privacy and security as a primary worry. Others raised issues of technical glitches, and hidden fees. Confidence is also limited. Only 20% felt “very confident” about resolving disputes in digital transactions, while just 14% said the same about evaluating financial products. These numbers highlight that access alone is insufficient; emotional and cognitive trust must also be built.
The financial attitude of this generation is best described as cautious optimism. About 75% associated money with security, and nearly half preferred saving over discretionary spending.
Equally notable is how Gen Z is reshaping decision-making. Traditionally, financial advice in Indian households flowed from parents and elders. This survey shows a break from that pattern: about 54% of respondents now rely on ‘finfluencers and bloggers’ on social media for guidance.
While this shift reflects growing independence, it also carries risks. The reliability of online financial content is uncertain, and overdependence on it can result in misinformed decisions. Strikingly, this pattern persists even among commerce students. Consequently, many of their ‘independent’ choices are shaped more by online content than personal analysis—a reliance that remains concerning given the questionable accuracy of such information.
The survey highlights that awareness does not always translate into consistent practice. Only a third of respondents review their financial goals quarterly. Many have never checked their credit score, despite knowing it exists. This suggests that awareness alone does not always lead to action—and that consistent, systemic nudges may be more effective than one-off interventions.
The survey also carries important lessons for policymakers. India’s financial inclusion narrative must move beyond ensuring access to enabling agency. Financial capability cannot remain confined to commerce streams or specialised modules. It should be integrated across schools and universities as a core life skill. Programmes must be experiential and event-based, addressing milestones such as receiving a first salary, understanding credit scores, purchasing health insurance, or filing taxes.
For regulators, reinforcing trust is critical. Stronger data privacy frameworks, simplified grievance redress mechanisms, and clear, jargon-free disclosures can help reduce hesitation. The platforms should be encouraged to design step-by-step learning pathways and offer risk-adjusted on-boarding for new users.
For banks, fintech startups, and insurers, the challenge is to shift focus from customer acquisition to customer empowerment. Gen Z values flexibility, modularity, and control in their financial products. Micro-investing platforms, gamified savings tools, bite-sized insurance products, and AI-driven financial health dashboards are quickly becoming baseline expectations.
At the same time, partnerships with educational institutions and credible influencers can expand financial awareness through formats that resonate with this generation.
The report states that trust, transparency, and guided autonomy will be the foundations of sustainable engagement. Gen Z is not passively waiting to be integrated into the financial mainstream; they are already influencing household decisions, peer behaviours, and even market trends. But they continue to navigate the system with caution, partial knowledge, and varying levels of confidence.
Notably, Gen Z in India now numbers 377 million and accounts for 43% of consumer spending, totaling approximately US$ 860 billion, with projections indicating this could rise to US$ 2 trillion by 2035. As Gen Z’s financial maturity progresses, their influence on the economy is set to expand, underscoring the importance for policymakers, financial institutions, and educators to comprehend and foster their financial growth by progressing with them, not ahead of them.
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