Finance Trend: Never heard of Fintech

‘Does it have anything to do with vintage?’ Millennials don’t know what Fintech is, and that’s a problem for both Millennials ànd the industry. What’s to be done?

Part I: No student knows Fintech.

(by Frédéric Olivier / B-Hive)

The growing industry of Fintech is on its way to leave a lasting and substantial mark on the economy and society as we know it. From buying clothes and your Christmas’ gifts online to transferring money to that one friend you owe a beer to, consumers have been enjoying the benefits of Fintech on a daily basis, perhaps without even knowing it.

Being part of the so called “digital generation” myself, I can’t picture a day without using my laptop or smartphone, for a wide array of activities. But even though we are the most digitally immersed generation yet, our knowledge of the actual industry of Fintech and its countless applications, is still remarkably low.

I’ve asked multiple students, all enrolled in different degrees and coming from diverse backgrounds, what the first thing was that came to mind when hearing the word “Fintech”. Here’s a list of the funniest answers I received:

“Does it have anything to do with vintage?”

“Is it some type of Finish technology?”

“Is it fish related?” (Someone even mentioned the movie ‘Jaws’)

And so on.

Even when I explained the term stood for financial technology, only a handful of them linked it with online transactions, ecommerce, new financial products or anything else related.

Basically, my understanding so far is that most of today’s student aren’t up to date when it comes to Fintech. Since there are no Fintech related bachelors nor masters, chances are this won’t change much in the near future.

The lack of knowledge about Fintech makes for a twofold challenge. First: the further evolution of the Fintech supply is strongly interlinked with the demand. Since Fintech is very much future oriented, the structural link to younger people should be optimized. Secondly: since the technology is evolving and becoming more complex, it will take time to educate future Fintech employees who won’t have learned about it at school.

The lack of knowledge signifies that the level of innovation and the rapid evolution of Fintech in Belgium will decelarate. We’re doing a great job building the future of Fintech, but to assure this growth in the years to come, we should focus more on tomorrow’s builders. Within 3 years, Belgium is expected to have 230.000 ICT-jobs, which is 30.000 more than the qualified people that are working in ICT today.

Although recently a few initiatives were being launched (e.g. BeCode), I believe there should be more opportunities for students to study different aspects of Fintech within their study, encouraged by their university or high school. Fintech is being labelled as the future, so we should invest in its students.

Part II: No Millennial knows Fintech. But don’t let that fool you.

(by Maarten Leyts / Trendwolves)

Ask 10 Millennials about the definition of Fintech, and only one will answer you correctly (if you’re lucky). But don’t let that fool you, or think that as a bank or company, you shouldn’t invest in financial technology for your clients. Because nine out of these ten Millennials is using financial technology on a daily basis.

Life has become phygital, which means that — for youngsters as for the rest of us — the boundaries between digital and fysical are fading. For instance, we use our banking app to transfer money to friends and colleagues instantly, but we go see our banker face-to-face (in the bank/video call) for troubleshooting a financial affair. This trend is unlikely to go away. Technology will continue to infuse our daily lives, be it less and less intrusive. But the technology is no goal in itself. People don’t want tech, they want convenient, instant and transparent services. Technology is only the means to an end.

And Millennials expect the same from financial services as they do from other services. They want them convenient, instant and transparent. That’s not the case today.

An app you can’t use without a security token is not an convenient service. A bank transfer that takes three days to effectuate is not an instant service. And a contract or loan that isn’t easy to compare with other loans or contracts is not transparent service.

Although the first might seem the most relevant, the latter is even more important for the successful implementation and integration of Fintech in our daily lives.

Because youngsters feel negative towards a lot of online services that they’re using today. They do use them, because it’s so easy or because all their friends are using the service, app or platform too and they don’t want to miss out. But they mistrust the companies behind it, and most of them say — if asked — they would prefer a more transparent alternative if it would be as easy and if their friends could reach them there too. In order to start building trust, Fintechs and incumbents both should boost transparency, by reaching out to youngsters with information and knowledge. Youngsters love to learn, certainly about the technology and the services that they are using on a daily basis and that for now seem like a blank, impermeable wall. Generosity is the first step towards knowledge, trust, and the desire to start a career in Fintech or anything related.

This column is a Trendwolves and B-hive collab. Read the other columns following this link.