Clash of generations in the fintech sector

Monday, 18 november 2019 | Redacción CEU

It is said that Millennials are well-prepared professionals, who are demanding and always connected, and with an entrepreneurial profile which leads them to looking for new experiences constantly. As they were the first users on the digital world, most sectors, including finance, focused on them: they designed products for them, with high performance, which were digital and aimed at satisfying their needs and interests. Gen Y seems to have answered well to that caring attention, but what happens with the rest of the generations? Specifically, the fintech world is beginning to take steps in other directions, for example, by creating applications aimed at an audience that is increasingly attractive: Baby Boomers.

Millennials are considered the fintech generation. Mainly, because they have been those who have experienced the transition from a traditional banking model to a model that integrates a new catalog of financial services which are focused on the digital universe and encouraged by new technological advances. Precisely, as this segment of the population represents the main user profile of fintech companies, this generation is the one that seems to be inspiring the dynamics within the sector: immediacy, globalization, customization, the arrival of big techs to fintech firms, financial inclusion, the use of disruptive technologies, etc.

The fintech generation

Virtually all experts agree the favorite channel of communication for millennials is cellphones, in particular, instant messaging (text and voice messages). In fact, the young segment of the population is known as the mute generation due to its lack of interest in making and receiving calls. Obviously, this trend has also been reflected in the financial world. Millennials do not like to go to a bank branch, they prefer to carry out all transactions through their smartphones (or computers), and if it is possible without having to make a call. This preference has been decisive in the boost of fintech companies, but it has also had a significant impact on the new strategies deployed by the traditional banking sector.

On the other hand, Millennials have a different economic approach in relation to the generations that preceded them. The economic crisis broke out just when these young people had to enter the labor market. That is one of the reasons why they pay close attention to their personal finances. In turn, factors such as their digital skills and the search for immediacy have led them to establishing a closer relationship with the world of digital finance. In this relationship, certain trends can be perceived, for example, Millennials rely more on new technologies, are prone to make financial investments (as long as they do so through their smartphones), attend to the ideals that the companies defend and the impact that their investments have on the environment, etc.