One in five Kiwis plans to or has invested in cryptocurrency

One in five Kiwis has tried or is planning to try investing into cryptocurrencies like Bitcoin. Photo / File

Investing in shares and cryptocurrency is rising in popularity and younger generations are taking it up at an even faster rate.

Nearly 40 per cent of respondents in a survey of 2000 people undertaken on behalf of the Financial Services Council said they currently use or plan to use micro investing platforms like Sharesies, Hatch or Stake.

Richard Klipin, FSC chief executive, said over the past 18 months the industry had seen an incredible rise in digital investors.

"Our research has revealed that 38.2 per cent of adult New Zealanders currently use, or plan to use, micro-investing platforms. That is about 1.5 million Kiwis and reflects a transformational shift in how we are choosing to invest our money."

Klipin said the shift was particularly noticeable among younger New Zealanders, with around 55 per cent of under 39-year-olds likely to use them.

"The research shows that since early 2020 New Zealand has followed the global trend towards investing in shares, as well as more speculative assets such as cryptocurrencies."

The research found the percentage of respondents with NZ share investments rose from 23 to 30 per cent while those with international share investments rose from 11 per cent to nearly 18 per cent.

Holders of cryptocurrency investments also rose from 3 per cent to 9.5 per cent between March last year and April this year.

But those investments in KiwiSaver dipped from 76 per cent to 65 per cent although the FSC report noted this dip was not what its members were seeing.

The research showed that the more established and "traditional" online banking, money transfer and smartphone apps were well used in New Zealand, with a majority either having used, or planning to use them.

"In comparison, less than half of the survey respondents were using or planning to use newer technology like digital wallets (eg Apple Pay and Google Pay), buy now pay
later, micro-investing, digital currency and robo-advice tools," the report noted.

Around 30 per cent currently used buy now pay later services and a further 13 per cent planned to use them while 16.7 per cent said they currently used micro-investing platforms and a further 21.5 per cent planned to use them.

The research also found one in five (21 per cent) were investing in or have previously invested in cryptocurrencies - an increase of around 7 per cent since March 2020.

Richard Klipin, chief executive of the Financial Services Council. Photo / Supplied

Klipin said the rapid rate of technology adoption had been turbo-charged by the Covid-19 pandemic.

"The ease of access that tech provides makes investment more appealing for people who previously didn't really consider it as an option."

Men were more likely than women to use micro-investing platforms, digital wallets, digital currency platforms and robo advice services.

While women were more likely to use buy now pay later services and smartphone apps.

The biggest reason respondents cited for using micro-investing platforms was to better invest or grow their money followed by their ease of use and then improving their financial knowledge and capabilities.

But despite the popularity of the new technology many remain wary of security and the potential for fraud.

Klipin said most respondents were concerned with the risk of online fraud, identity theft or scams, that could result in financial loss and 80 per cent were worried about privacy.

"After a number of high-profile cyberattacks and ransomware attacks it's understandable and encouraging that many are wary about the privacy of their personal information and their finances when using online platforms.

"That's why it's crucial that the financial services industry, and the professionals who work in it, keep pace with these new ways of investing and managing personal finances, and provide the information to support considered financial decisions."