The Challenge of Developing the best Fintech Products for Millennials
In this article, I aim to take an in-depth look at what to take into account when developing fintech for millennials. Millennials are one of the most articulated fintech target customers. Thus how do they really differ from other generations in their use and expectations for financial services? Are they really the best target to aim for? And what to take into account when thinking of a new fintech product for millennials?
Who do You Really Need to Go After?
The largest generation in US history, the Millennials (also known as Gen Y), are currently stepping into the economy. There are more than 75 million of them, and they spend $1.3 trillion annually. On the other hand, there is the generation X (born early-to-mid 1960s to the early 1980s), who are still the major money spenders in various industries. Gen X are the ones owning the big capital, making independent monetary decisions for themselves and their family members. However, over time, Millennials will earn more money, inherit and as they reach their prime working and spending years, the impact on the economy by this Gen Y is going to be immense. Therefore, as Millennials acquire wealth, that is the time, when fintechs need to be the first to serve them their preferred services, which are obviously going to be mobile.
As millennials acquire wealth, that is the time, when fintechs need to be the first to serve them their preferred services.
What makes Millennials different from other financial service customers?
Contrary to the previous generations, Millennials have a different basis for decision making. They spend less for the luxury things, responsibly estimate when to marry, or to own a house, highlight healthcare much more than Gen X. Therefore, the challenge is to find a key how to meet the different generation Y mind-set expectations in providing solutions to their wealth management.
A major difference with other generations is their financially more challenging starting point, mainly due to high education costs that impact spending habits and their view towards the liabilities — marriage, mortgage, although considering these choices later in life. As well, Millennials are reluctant to buy luxury goods. Instead of paying to have their own cars, music, films or other expensive goods, they opt for the access to products without the burdens of ownership, such as temporary payments to access the same goods, that overall gave a boost to the sharing economy (source: The Atlantic).
Gen Y are digital natives from early days surrounded by electronics, internet services, social networks. Easy to use digital service is a must for the millennials and the inconvenient way of information presentation makes them leave for another provider without hesitation.
How to develop a Millennial-engaging fintech product?
Be Transparent. Millennials’ affinity for technology is reshaping the service industry immensely. They are able to access all the information on the web and are prone to compare products using digital tools and find the best value for the best price. Additionally, Gen Y has high standards for the brands they identify with. That is all why a high degree of transparency is necessary. It isn’t hard to do that in the digital world. Showing full details about their spending, disclosing the full cost of the service, showing the alternatives how to save or how to get more value for the money are ways to bring more transparency for the service.
Move your know-how to digital platforms. Customers want to interact whenever, wherever. Give them the convenience they seek through digital tools. Give them as much information as possible. Sixty-one percent of customers want to research on their own, and 42% buy on their own without help from representatives or experts. Digital channels that provide information, options to compare data, interact with the services providers will win the attention of a Millennial.
Go FULL Mobile. Money serves as a tool to achieve goals, like having time for yourself for a Millennial. That is why making the necessary steps in a quick and easy way is crucial. While the usage of Desktop is decreasing, a mobile phone is attainable to the GenY 24/7, and that is the main tool to focus on. American Banks Association study shows that opening accounts is more likely to happen over the mobile than face to face communication. 6 of 10 Millennials track their money using mobile because it’s more flexible than other ways.
Next to that, forget the call centers. Using chats and social networks to contact the service provider resonates best with this generation.
Invest in user experience. Digital and mobile are not enough. Technology natives want to have convenient, 360º digital technology tools to manage their money. The technology must be ergonomic, the information should be well organized, actions – quickly executable. Easy to use and well-designed digital solutions will draw Millennials’ attention and retain them as customers. Plan UX before you start developing your digital channels and make that an important start for your digital journey.