By Joe Hall, UK Managing Director of eToro
From crowdfunders to P2P lending and mobile banking to social trading, fintech companies are levelling the playing field by lowering the barriers to entry for traditionally high-level, top of the market financial services, to the benefit of a huge array of customers.
Research that we’ve done previously revealed that millennials, those aged between 18-24, are more likely to place trust in new fintech platforms and digital services than older generations.
As children growing up against the background and aftermath of the financial crisis, millennials embraced fintech faster than the economy recovered, embracing solutions that streamline finances faster than any other generation. Smartphones became the catalyst for greater interactions with their personal finances from checking bank balances, making money transfers or paying for things.
Spurred by the success of first movers, such as Mint, a new wave of apps tracking consumption patterns came onshore, assisting with boosting savings, without the needs for constant monitoring and adjustment.
The new abundance of ways to invest, became a solution to the heavy student loan. From crowdfunding to P2P, this generation made clear that they didn’t need to settle for the bank’s BS – by which I mean, business services, of course.
And cost of entry was lower. When we look at the traditional fund management industry where fund managers and private banks routinely demand £250,000 or more to open an account with them, fintech providers like ourselves completely removed this unnecessary barrier to entry. On eToro, people can bypass highly paid fund managers and opaque fee structures and start trading with as little as $200.
Growing-up around the social spheres of Facebook and Myspace, millennials are naturally drawn towards the digital land of online information sharing. They are the generation of globalisation and are the future leaders and consumers of this world. As the internet brings to life the opportunity for international investments, the basic ISA platter on offer at the local bank loses appeal in comparison to the global financial markets now open to investment.
As part of the finance industry and the fintech ecosystem, we need to keep the future consumers at the heart of what we do. New innovative offerings attract attention, but it is only those that meet customer needs that cut the cheque. eToro defines every new innovation with such purpose.
So why would millennials trust the shiny -suited asset manager, hiding behind a closed portfolio, when transparency is possible? Why deal with a greasy salesman, when they can see the best deals on comparethemarket? Why settle for the low cash ISA rates, when crowdfunding options are on offer with higher returns?
The customer is always right. Millennials know the way to invest.