Fintech companies have now been provided with a great opportunity by the growing preference of millennials to accomplish tasks through digital applications.
CEO of FIS, Anthony Jabbour, says the digitally native ways of millennials have given more insight into their needs and wants than any previous generation.
FIS, the world’s largest global provider, dedicated to banking and payments technologies, conducted a research recently. It showed that millennials already make up a third of banked consumers in America. This highly educated and entrepreneurial generation represents a banked client base almost equal to baby boomers.
The data also showed that as these young consumers seek to pay for school, buy a car or start a business, banks will face a tsunami of demand for personal financial services. This is because 86 percent of banked millennials report that they have no form of financial adviser.
The generation, which the research says will be the largest banking segment soon and poised to inherit trillions of dollars from their parents over the next few decades, are already used to transacting life in clicks and swipes.
That’s where fintech companies come in because millennials need fast and easy mobile service and not calls and meetings as traditional banks do. Jabbour added that this is particularly important as latest trends suggest that millennials will opt for convenience over a big, trusted name in banking.
President and founder of CCG Catalyst, Paul Schaus, wrote in American Banker:
While banks have steadily built up their online and mobile channels — in part to appeal to millennials — the products and services they offer in those channels are built on top of legacy systems and fail to provide the level of speed and personalization millennials expect. A customer might be able to deposit a check from anywhere with their mobile device, but it can take several days for that deposit to post to the user’s account.
Schaus suggested that banks should embrace blockchain technology and artificial intelligence now or risk losing millennials to fintech companies that aren’t bogged down with old technology.
This, he says, will enable them to cater to this increasingly important customer demographic and deliver immediate resolution to customers’ transactions and interactions with their banks.
Beyond real-time payments, the blockchain can be used to transfer data quickly across a large number of use cases, including real-time account opening and flexible loyalty programs. For example, blockchain startup Ascribe is working with Capgemini to offer a distributed ledger-based application that will let customers combine loyalty points across different loyalty programs and spend them instantly with a range of different merchants.
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