YOLO (You Live Only Once), FOMO (Fear of Missing out), slay, woo-woo, yaas, and a lot more of these words will give you a tough time if you try looking for them in a Merriam-Webster or a Macmillan dictionary. But if you ask these to an 18-year old, you would receive instant explanations that will leave you surprised.
Well, this indeed is part of the 21st-century youth culture.
Who are millennials?
As per MSCI, in 2020, approximately 1.8 billion people across the globe or approximately 23% of the global population can be tagged as millennials, a group of people spanning from the early 80s to the mid-90s. In fact, millennials are in size much larger than any other adult cohort.
Interesting, isn’t it?
Research also states that by 2025, millennials will comprise three-quarters of the global workforce.
Well, the size of the cohort is not the only factor that makes millennials a hot topic for discussion for institutional investors. Believe me you, the variety of unique characteristics such as confidence, ambition, and the zeal to conquer the world place them in an advantage mode, especially during the time of technological expansion.
So, don’t you think it is essential to decode the equation between fintech and millennial investments?
Here is all that you need to know.
Managing money is one of the finest life-skills that plays an essential role in managing income and expenditure effectively. In today’s fast-paced world, where financial markets are evolving there is ample opportunity for great returns, only when done wisely.
It is essential to thoughtfully weigh opportunities and risks that come along with investing.
Now the million-dollar question is, is it really that important to invest? Or is it a better option to let your bank account grow fatter?
As per an ETBFSI survey focusing on millennial investing, 60% of millennials believe that investment is an activity absolutely necessary to manage money to achieve desired life goals such as buying a car, home, or something bigger for the future.
Why is investment a better choice?
As aptly coined by Warren Buffet, “Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”
How are millennials transforming fintech?
Fintech is flexible and making an energetic move toward mobile. And being the largest generation in American history (people born between 1980 and 2000), millennials are a tsunami of new customers transforming into the workforce, making money and demanding a different relationship with financial institutions that take care of their money (This money will represent USD 7 trillion in liquid assets by 2020).
According to the Millennial Disruption Index (MDI), a three-year-long study of industry disruption are scary for banks but great news for fintech start-ups,
As one out three millennials can possibly switch banks in a span of 90 days and more than 50% of the 10,000 plus respondents are of the opinion that banks aren’t offering anything different from other banks.
Another interesting piece of information revealed in the MDI is that more than 70% of the respondent millennials mentioned that they are extremely excited about a new offering in financial services from tech giants such as Apple, Google, Amazon, and PayPal.
Decoding fintech and millennials
Millennials are comfortable with digital technology as they have grown up with it. This is the reason they find it easy to move to the web and away from brick-and-mortar businesses. In their minds moving to mobile apps is no great deal.
The same is valid when we talk about millennial financial services, ranging from making payments, investments, lending, remittances, crowdfunding, and more.
In fact, about 75% of them are of the opinion that mobile banking is essential.
Millennials and mobile banking
Why can’t I do that on my phone?
Proliferation of mobile devices, advancements in mobile technology, and incessant internet availability make millennials want to get everything at the click of a button (even banking).
So, financial companies that look forward to wooing and keep millennial customers associated with the institution need to ensure that they offer customers mobile banking options. This draws a line between success and failure.
The Digital revolution is entering almost every aspect of financial services. Right from banking to wealth management, investments, insurance, and a lot more. All of these financial services indeed face competition from a range of new online-challengers.
This definitely is a concern for traditional banking institutions if they fail to appeal to the demands of the younger generation.
Let’s take a break
Just like the size of the cohort, millennials and their investments are a vast concept that cannot be concluded in a single article. To know more about millennials and investments, stay tuned for part two.
See you on the other side.