Financial professionals are the changemakers of the future

By Tanja Tippett

For young people wanting to make an impact on the world, a career in the financial industry is an ideal starting point. Over the past two decades, the focus in the financial industry has shifted from primarily driven by profit to being more ethical and environmentally driven – which aligns well with the Gen Z values of authenticity and environmental and social transformation.

A recent conversation with a group of young people brought to my attention how little awareness there is about what the financial industry does – and can do. A young man thinking about what to study at university said the financial sector didn't interest him as it "was all about money and making profit". While that certainly might have been the case once, much has changed since then.

The movement towards sustainable finance, green and ethical investment, inclusive financial products and more innovative financial instruments has gained momentum globally, and South Africa is catching up fast. The Global Financial Crisis in 2007-2008 highlighted how greed and unsound practices could ruin lives and exacerbate inequality. Meanwhile, the increases in natural disasters and extreme temperatures linked to climate change have pressured the business world to show more commitment to protecting natural resources and minimising its effects on communities. 

These topics are of great importance to Generation Z, the group of young people born after the Millennials from about 1996. This generation has been described as social media and tech-savvy, more racially and ethnically diverse and perhaps the most empathetic generation to enter the workforce.

In South Africa, one study shows that young people prefer brands that prioritise helping others. They want to see companies take action on social issues and are even willing to pay more for brands that are black- or female-owned or have a positive impact on society and operate more sustainably.  

This social awareness corresponds with my experience as a lecturer at the African Institute of Financial Markets and Risk Management (AIFMRM) at UCT. We conducted a snap survey among students, asking about their concerns for the future. At the top of their list were global instability and wars, followed by climate change, gender-based violence, affordability of food and housing, discrimination, and mental health. Artificial intelligence (AI) was at the bottom of the list.

It's about more than making money

Gen Z may be young (the oldest among them would be about 28 now), but perhaps more than any other generation, Gen Z is fuelled by purpose. Having experienced a global pandemic, economic recessions and significant cultural shifts during formative periods, they see the world differently. They're passionate about solving societal problems and expect their workplaces to share similar beliefs.

"In the past, we've underplayed the power of Gen Z, but our data shows that they're the ones who will unlock societal action and activism at scale – even among older demographics. And in South Africa, they're going to continue to use social media as a political and social activism tool," says Sanesh Maharaj, head of brand at Edelman South Africa, which compiled a global report about consumer trust and brands. "Gen Z are powered, not paralysed by fear."

The financial world could use more of this energy. There is enormous growth in areas that suit Gen Z perfectly – whether they go into banking, investment management or insurance. Take impact investment, for example, also known as sustainable investing. It refers to sustainable business and environmental, social and governance (ESG) investments. This market exceeds $100 trillion globally. Impact investment is increasing year-on-year as awareness of the climate crisis and its effect on humanity gives rise to alarm. Legal consultants Bowmans say more than half of institutional investors internationally have responsible investment built into their investment approaches.

Now is the time for investors to change direction

For a practical example of how finance professionals can effect change, investment advisor Sloane Ortel describes watching a documentary on poverty in Guatemala, focusing on the financial situation among ordinary citizens who dream of owning a stove. Ortel says, "The wrong thing to take away from that is: 'Oh, all they need are stoves!' The question worth asking is: 'What if they could get a loan?'"

Sub-Saharan Africa is deeply conscious of addressing rising poverty, inequality and unemployment. The region has about 80 million "unbanked" people. These individuals don't have access to formal banking services and can't get loans, take part in savings schemes, get credit and apply for funding for small businesses. Innovative financial services, lending schemes, and technology have already been shown to make a big difference.

Whether it is to involve local people as suppliers or providers of mobile money points or arranging cheaper money transfers via mobile apps like MPesa and Zoona; these initiatives are changing lives. The financial industry is vast, and there are many dynamic career options. The sector is also rapidly evolving, with exciting new positions in areas such as climate finance, digitalisation, disruptive technologies, public-private partnerships, new financial instruments, etc. It is important to know that a career in the financial industry goes beyond traditional banking.

There are many opportunities for positive change and social impact, which can resonate with your values and harness your skills to help you make the change you want to see in the world. Learn how capital flows and money is created, and then use your knowledge to beat the system at its own game.

To all the young Gen Z people wondering about finance as a possible career path, please join us. We need your energy and enthusiasm, but above all, we need your heart.

Tanja Tippett is an associate professor at the African Institute of Financial Markets and Risk Management (AIFMRM) at UCT.