How millennials are reshaping the financial industry
Millennials have definitely dominated the headlines and captured the interest of the world’s biggest names. The millennial proportion of the population is growing significantly; they are poised to become the largest demographic group in the nearest future, more than 50 per cent of the population in the Middle East between 18 and 34 years of age.
With this, millennials are also expected to grow their wealth significantly in the upcoming years. According to HSBC, 63 per cent of business owners in the Middle East are aged 35 or under.
Their unique psychographics and ambitions are driving drastic changes in the financial industry. This is driven by the demand for having more control over their wealth and investment decisions, which is widely facilitated by technology.
According to Deloitte, 57 per cent of millennials would change their bank relationship for a better technology platform solution. The upcoming generation is highly tech savvy, they depend on technology to carry out their daily tasks, from reading, shopping, socialising and more. Smartphone penetration among millennials in the GCC is in the high 90s and mobile usage is at almost 100 per cent.
The wide availability of digital platforms has created a very convenient virtual world for millennials to efficiently and securely carry out their tasks, giving them a sense of total control over their online transactions.
The demand for advanced financial services among millennials is increasing; they have a strong influence on the industry to transform and adhere to their needs. It is very well known that consumer demands are in the root of all innovations, and in order to stay relevant in this shifting landscape, the financial industry needs to step up and deliver unique solutions and products.
Traditional means of finance cannot be relevant any more. Service providers need to focus on creating the perfect product design, personalised customer experiences and the technology of course; these trends are causing a great evolution in the financial industry.
One of the main mindsets that is driving this shift is that millennials are open to new brands and approaches more than their predecessors. And most importantly, they trust the technology process.
According to HootSuite, over 76 per cent of affluent millennials are open to trying financial offerings from non-financial brands. This openness to new ideas has created a rush in innovation within the financial services industry. On the back of this, FinTech companies have the upper hand of using advanced technologies when compared to the big traditional banking systems.
FinTech companies have gained extreme competitiveness as they took the traditional financial processes and transformed it through innovation to enhance consumer experiences while still being able to carry out the same financial tasks; whether it is storing money, purchasing or taking loans, they can all be done digitally now.
With the help of a more frictionless and trustworthy experience, millennials are becoming more open to putting their money into the financial industry.
Overall, millennials are reshaping the financial industry and those who accept these changes will stay ahead in the competition, while those who do not will be left behind. The change in preferences and buying habits has led FinTech companies to innovate in technologies to enhance user experience and lower running costs, putting them face-to-face with the older and more established institutions.