Millennials and Technology Are Driving the Fintech Space

Baby boomers are significantly less likely to trust financial technology services than millennials explain’s Girirajan Murugan, CEO at FundsIndia.com. In a conversation with Himali Patel, Murugan shares insights how millennials and technology are not only shaping the fintech space but also driving its growth. Excerpts from an interview.  

1. Millennials are slowly putting aside a higher percentage of their income as savings and investments. What different ways or techniques are fintech companies incorporating to penetrate the millennial market?   

The younger generation will gravitate toward brands that provide the best user experience, the best value, and can ultimately help them reach their financial goals. Artificial Intelligence, Machine Learning and customer service anytime, anywhere is where the future is headed. Many fintech companies have already seized upon this niche opportunity – of millennials expecting digital-first service. Some of the use cases adopted by Fintech companies like us are Algorithmic Trading (using AI) and Robo Advisory.

2. Fintech companies are disrupting markets with tools like AI that create seamless customer services. What major benefits can we see with regard to the integration of technology in conventional methods of wealth management? 

- Integration of Technology in financial service has been very beneficial for consumers worldwide, such as the ability to serve customers that were not previously attended to, a reduction in costs, and an increase in competition.

- Best Customer Experience - Chatbot integration in financial service will provide the best customer experience as it is available 24x7. By 2022, Banks might automate over 90 per cent of the transactions through chatbots.

- Efficient advice – many of the latest systems rely on Robo-advice to give people guidance on their finances. This can be a very quick and low-cost option to get useful information on investments.

- Greater convenience – the companies involved in financial technology make full use of mobile connectivity. This can significantly increase the number of people who can access this type of service and also increase the efficiency and convenience of transactions 

3. One of the major issues with Fintech is the lack of trust in technology. Would you say various FinTech companies are addressing it? If so, how?

There is a definite generational divide when it comes to emerging technology. Baby boomers are significantly less likely to trust financial technology services than millennials. They’ve been accustomed to traditional financial institutions and industry professionals throughout their lives.It has elicited an increase in confidence-building efforts on the part of Fintech companies.However, this is slowly changing, as Fintech players have realized that the secret to enhancing credibility is through better user experience. Superior user experience will attract new users through referral. This will in turn increase customer retention. Fintech companies have to focus on not just building a sustainable revenue model, but also one that fosters trust.

4. What are the major risks involved with the evolution and integration of technology in the financial services sector?

Advanced technologies and business models can increase cyber risk if controls do not keep pace with change. Heavier reliance on APIs, cloud computing and other new technologies facilitating increased interconnectivity with different Fintech firms, which may not be subject to equivalent regulatory expectations, could potentially make the banking system more vulnerable to cyber threats, and expose large volumes of sensitive data to potential breaches.