The growth of FinTech with Gen Z
Sitting amongst friends over the weekend, the topic of banking came up. The way it has changed over the years, the likes, the dislikes, the challenges, we discussed it all, referring solutions to each other. Not surprisingly, they were all FinTech solutions; from digital banking to money transfers, lending apps, Apple Pay, fingerprint security, and more.
For those who have been using the Liv digital bank by Emirates NBD, those who have recently downloaded HSBC’s new app in the UAE, and those whose mobile bank applications support fingerprint security, will appreciate how easy it has become to check balances and make transactions. It’s also why Apple Card’s uptake was so quick and popular.
Talking about international banks and challenges, there are certain ones in the UK, such as Barclays, that do not allow you to continue to have mobile banking if you have surrendered your mobile number.
While digital banking is gaining traction, evident with Mashreq and Emirates NBD launching their digital banks to answer to the needs of the market, many of those who have faced the challenges of digital banking are keen to have a personal relationship with their banker; so that they have someone to call in case they face issues again. That’s where traditional banks win in the market.
The uptake of FinTech is growing majorly with the younger generations, a.k.a. the millennials and Gen Z. They are the ones who do not have patience for extensive forms and wait periods of a few weeks before having access to a bank account. They are the ones who do not want to bother with paper bills and credit card receipts. They want everything on the go, at their fingertips.
Catering to this generation is the ultimate goal of FinTech solutions, as that is their core audience who is growing to make up a large segment of the market.
Moreover, the below 18 year olds are the ones who are largely unbanked and not supported enough by traditional banks. In time, they’ll make up a growing majority of the market.
FinTech has the power to grow with this generation, and leverage their growth to gain the older consumers’ trust to switch over.
In addition to making the financial sector less complicated, faster, and more transparent, financial technology is also democratising the industry, bringing banking to the unbanked, promoting education and ease for better money management, and reinstating trust in the sector.
We see FinTech growing with the Millennials and Gen Z. Their demand for more transparent, easy and secure financial services is the fuel that is seeing FinTech grow. While some may still prefer to bank the old-fashioned way, this is quickly changing as people learn about better ways to bank that also saves them their hard-earned cash.
It isn’t a coincidence that this growing sector is seeing tech giants such as Apple and Facebook move into the space. Will their network effect help them win? For some more than others. It’s a regulatory decision after all, and is dependent upon people’s trust.