With fintech’s constant growth and development, adapting and keeping up with the changes is essential. While firms can benefit greatly from the use of financial technology, fintech is no longer just a comfortable alternative but a necessity in order to offer consumers more options – especially millennials, who have been accustomed to using their phones for everything.
In today’s competitive sphere, established firms who choose to not make use of technology are bound to struggle. Starting an internet-based startup would cost $3 million in the 1990s, whereas now it would cost $300. That alone marks the significant adaptation of fintech in today’s world.
A report by Millennial Monday Mindset shows that 88% of young adults would prefer to never physically enter a bank again, and this is no surprise. The banking and real estate industries are two which are quickly needing to adapt to fintech. For millennials, banks are quickly moving towards a state of impracticality. Banks have long been bound by regulations that have worked and served them efficiently in the past, but are now restricting them from new and innovative implementations.
Aki Ranin, commercial director at Tigerspike, which is a global digital products company, says that Millennials are used to what’s free – they do not have a lot of money, and even when they do, they are not willing to pay for something unless it is a premium service.
Therefore, with regards to apps, attracting millennials is best done through starting small and adding small fees for extra services – Much like Spotify, a music streaming service favoured by millennials. Millennials have proven to not be willing to pay a chunk of money upfront for a service. Ranin goes on to say that the U.S is leading in this regard, where things are very millennial-oriented.
Millennials are a driving force behind modernisation and pushing firms to advance from the traditional methods that have been in use for so long, and today, there is no better market to work towards than that of millennials – especially seeing as older generations are also being influenced by their children, and therefore beginning to follow millennials towards a path of cashless transactions. Daniel McAuley, cofounder of Wharton FinTech, said: “As the older generations retire they are turning to their children for advice on what to do with their money.” Firms should not ignore this.