Millennials and Fintech
It seems that millennials prefer avoiding face-to-face business when there are faster and more efficient ways to get what they want.
Fintech has taken advantage of these traits among millennials and are increasingly disrupting an unexpected industry: personal finance. Just like manufacturing companies replacing assembly line workers with robots, fintech companies have replaced traditional financial consultants with robo-advisors. They use algorithms and big data to determine the best investments for their clients that largely consists of an entirely new generation of investors.
Why is fintech popular among millennials?
Unlike their predecessors, millennials are known to distance products and services that tie them down and force hurdles on their decision. For most millennials, a student loan is the only long-term commitment they have. They avoid other long-term loans commitments like a car loan or a home loan. They would rather use car-share companies than owning a vehicle of their own, unlike their earlier generations. Serving the purpose is a priority here, and it applies to banking and financial services, utilities, and much more.
How millennials are challenging tradition
The millennials are almost like a tsunami of a new breed of manpower entering the workforce, earning money and demanding a very different relationship with organizations that safeguard their wealth. Millennial wealth is expected to represent $7 trillion of liquid assets by the end of this decade.
Researches on the spending and credit habits of millennials have revealed some frightening facts for banks but some great news for fintech firms. One in every three millennials is likely to switch banks in the months ahead. Most millennials think that banking products and services are no different from each other. These millennials look to fintech startups to overhaul the face of banking and financial services. According to reports, more than 70% of the millennials look forward to banking from their hand.
Millennials are the most comfortable with digital technology. They are digital natives because they grew up with in that era. Mobile apps are more acceptable to them than a laptop, leave alone traditional brick-and-mortar institutions. They have taken the mobile route for all their financial services. Investments, payments, banking, lending, borrowing, remittances, and every other possible transaction, are done on mobile these days.
The days ahead
Fintech companies are all set to capitalize the gaps in traditional financial services by introducing innovative products for millennials that address their needs. These will help customers save both money and time. Consistent themes in each of these products will be based on simplicity and personalization.
The future of banking and financial services, in the hand of fintech companies, will immensely help millennials. Customers are all set to experience tailor-made solutions with products and services implemented digitally. Robo-advisors riding on artificial intelligence will analyze your financial goals and warn you about any unhealthy financial habit. These are exactly the value-added services that millennials are hunting for.
Fueled largely by the demands of millennials, the fintech sector presents a $1 trillion opportunity for the financial services industry. The products in the offing may not entirely replace banks but will cause traditional institutes rethink their business models.
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