How Millennials Are Helping Drive FinTech Adoption

Once upon a time, people actually needed to visit their local bank branches in order to take out money, make a deposit, or get a loan. As International Business Times notes, this meant that customers were often making their banking decisions based on how much they liked the people they interacted with and might even open a new account or take out a loan for that reason. While some may miss the personal aspect of banking, a younger generation is embracing technology that makes banking more convenient and powerful.

Originally known as Generation Y, Millennials are loosely defined as adults who are between 18 and 34 right now. Since many of them have grown up with the Internet, there’s a general consensus that they are more tech savvy than previous generations. As a result Millennials are at the forefront of FinTech and other banking technologies.

According to IBT over 33% of the current workforce is comprised of Millennials with over a quarter of them making more than $75,000 annually. As big as their impact on the economy and banking at large is now, it’s only going to grow over time. WalletHub CEO Odysseas Papadimitriou explains this, saying, “Millennials are starting to buy homes and save for retirement and college funding. It’s going to have a huge impact in 10 years and in 20 years the banking landscape will be completely transformed.”

The first big change is the adoption of mobile banking. Last year more than half of all smartphone users reported engaging in mobile banking — a rise of nearly 10 points over three years. IBT notes that one of the reasons the technology hasn’t become even more prevalent is concerns over security that Millennials take just as seriously as other age groups.

Other non-traditional forms of banking have also caught on with the younger generation including peer to peer payments such as Venmo, saving and investment apps such as Mint and Robinhood, and even online-only banking. IBT reports that Simple, a bank that operates strictly on the internet, has experienced a 179% increase in deposits over the past two years. CNN Money also recently reported that the investment mobile app Acorns has helped Millennials save over $25 million so far.

We are no longer in an age where the average American knows their local banker. FinTech startups are changing the way consumers handle their money and the Millennial generation has shown their willingness to embrace these innovations. As Millennials mature and an even more tech savvy generation comes of age, it’s adapt or die time for the banking industry and the right time to be in the FinTech space.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...

Prosper Announces $75 Million Growth Capital Financing

A long-admired FinTech has added some new capital to its coffers and it continues to grow after more than 15 years in business. Recently, Prosper Marketplace announced that it had closed a $75 million debt financing round. This capital came from a fund managed by Neuberger Bergman and will be used to help Prosper meet the demand for its loans, credit card, investment products, and more. According to the company,...

Small Business Saturday 2022 Drives Projected $17.9 Billion in Sales

This past weekend saw the kick-off to the holiday shopping season with Black Friday followed by Small Business Saturday. Now in its 13th year, the latter is a promotion meant to raise awareness for small local businesses and encourage consumers to support them. Now, the initial figures from this year's event have arrived. According to American Express (which actually invented the retail holiday in 2010), an estimated $17.9 billion were...