By Paresh Davdra, co-founder and CEO of RationalFX
Millennials are the most widespread, educated and financially powerful generation that humanity has produced – they are transforming nearly all industries beyond recognition, with the world of Fintech being no exception.
Global society has been dominated by baby boomers for the past 50 years, with members of the generation wielding massive influence over issues ranging from cultural norms and behaviour to the legal and property industries. If the 20th Century was etched by the hand of the baby boomer, the 21st Century now belongs to the millennial. It is these complex beings that will, in the same way, define the way that the world is run for the next 50 years, shaping the future for generations to come. The transition between the two generations is therefore an important process, with companies vying for the right to plant a flag in the massive potential of millennials.
The ferocity with which businesses are currently competing for the attention of the millennial generation is due to the huge market they have generated, resulting from their adaptability to new technologies. Take, for instance, the trends in the financial world at present; the lines between the banking and the digital worlds are now blurring more than ever, with banks staggering under pressure to cater to younger customers. Today, almost a third of 26-36 year olds would switch banks based solely on the strength of the mobile app. In fact, 33% believe that they won’t even need a bank in the near future, and perhaps most interestingly, 73% of millennials would be more excited about financial innovation from one of the tech giants – Google, Apple etc. – than from their bank. As a result, being out of touch with the technologically sophisticated younger generation could spell death for the banking world as we know it – cue Fintech.
There is perhaps no better demonstration of millennials’ power over the financial industry than the rise of Fintech. The main driver behind recent developments in the field has been disruption, which spawned from the generation itself. Advances in Fintech have been a microcosm of the growth of our society recently – with a generation of people lacking borders or allegiance to the established norms of the previous generation, enterprise has flourished. Millennials create demand for new, low cost financial services that place customer satisfaction on top, and in doing so, encourage the progression of Fintech. In fact, three quarters of millennials now say they want to get their advice from tech companies rather than mainstream financial firms.
Mobile technology and millennials have simultaneously grown together over the years. Smart phones are as ubiquitous as anything now, and technological advancements mean that each person now has a computer in their pocket – a computer capable of carrying out financial transactions, checking your bank balance, and even getting a constant stream of complex financial advice. All of this begs the question: why would you go into a bank to check your account, to carry out a transaction or to seek financial advice, when you can do it anywhere from a mobile device? Traditional banking is more expensive, more time consuming and less consistent.
Perhaps the only reason people use traditional banking methods is trust – how many consumers trust an app on their phone as much as a qualified person standing in front of them? The issue here is that after the financial crash of 2008, negative perceptions of banks and bankers have run riot in our society. Many of the younger generation have completely lost faith in the banking world – and who are we to blame them? They need an alternative solution, and what they understand is technology and relentless innovation – a gap in the market which Fintech has now filled.
All this means that now is an extremely exciting time to be in the financial services industry. Innovation is the name of the game, with new tools creating products every single day and inventors becoming the entrepreneurs of tomorrow. This is not a temporary change either – not a revolution to be undone, but rather a process of evolution.
The financial world has changed forever, with technology and customer satisfaction becoming more important every day. With the millennials moulding the world, Fintech is a product of evolution, not revolution, and that’s why it is here to stay.