Tech

Digital Banks Can Dominate When Baby Boomers Pass Wealth

If millennials inherit trillions of pounds from baby boomers over the next few decades, digital-only banks could dominate.

As a warning to traditional banks, a survey by financial advisory firm deVere Group found that a huge number of millennials born between 1980 and 1996 use only digital banking services.

These consumers will be able to manage huge amounts of money in the economy over the next few decades.

A survey of 550 millennials in North America, the United Kingdom, Asia, Africa, the Middle East, East Asia, Australasia and Latin America found that 59% were already using digital-only banks or are planning this year. It became clear that there was.

Nigel Green, CEO of deVere Group, said the numbers are bad news for traditional banks. “The results of polls are a big problem for old-fashioned banks,” he said, and millennials are the fastest growing customer base for banks and the largest beneficiaries of wealth transfers in history as they inherit money. He added that it is becoming.

Trillions of pounds of wealth will soon be inherited from the wealthiest baby boomers to date, Green said.

At the same time, millennials are tech-savvy, “they grew up in tech and are digital natives,” he added.

Although digital-only banks have grown rapidly in recent years, for many they are the second bank to be used as a spending account, and most of the banking business is done through traditional banks.

As a result, they have been unable to steal a large share of banking from traditional high street players, many of which are still unprofitable after years of operation. In fact, FinTech Unicorn Stirling Bank, which obtained a British banking license in 2016, The first UK digital challenger bank to make a profit, October 2020. In March of this year, after a £ 272m funding round, its value reached £ 1.1bn.

Ciarán HindsAnalysts at Celent said demand for digital banking services has increased over the years. “It’s wise to focus on millennials, but given the types of products and services commonly needed across this group, digital engagement is growing in all segments, all in all. We support the case of ongoing digital investment in banks. “

“But arguably, this growing preference for digital-driven banking services is good news for new entrants and digital-only players, but it’s an opportunity for the industry as a whole to better target customer needs.”

This is part of the broader fintech revolution that accelerated during the Covid-19 pandemic, and it is clear when the increase in contactless payments will be considered.

According to UK Finance Contactless payments accounted for 27% of total UK payments Last year, the Covid-19 pandemic changed consumer habits. The impetus for contactless payments across age groups was the need to reduce physical contact. According to a survey, 83% of UK people use contactless payments, and their age group and region are not below 75%.

Confidence in FinTech increases as usage increases. This only raises interest in Digital Bank, a technology-driven organization that provides user-friendly services.

Digital Banks Can Dominate When Baby Boomers Pass Wealth

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