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Why modern life needs modern banking

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Advertising Content from Citi

How younger generations are revolutionizing our culture—and banking

How younger generations are revolutionizing our culture—and banking

From eschewing bar soap to saying no to mayo, Millennials just want to do things differently—and that’s true in many ways, including reimagining how our society views common life decisions.

Mostly, that means giving today’s rising generations more time before diving into major personal and financial changes. Compared to Boomers and Gen X, Millennials are marrying later, buying homes later, having children later—and that’s if they’re doing these things at all.

Why the delay? For many Millennials, it comes down to their finances. They want to feel a stronger sense of personal financial stability before undertaking a transformative endeavor like marriage or starting a business. This makes sense for a generation raised in the shadow of the 2008 recession, who treat banks differently than previous generations. A recent Gallup report shows only 66% of Millennials have visited a physical bank in the past six months, compared to 81% of Boomers. Where, then, are they banking?

The FinTech revolution

Enter FinTech, or Finance + Technology. The future of banking lies online, and Millennials—as in so many other ways—are at the forefront of rethinking the way we bank and handle our finances. From peer-to-peer payment apps to micro-loan startups, FinTech is stepping into the banking sector to offer fresh solutions for a rising generation.

According to a recent global FinTech study commissioned by Citi, major life events—like marriage or starting a business—are the leading indicators in predicting whether a consumer will try FinTech. Of those polled, 12% said that starting a business was their deciding factor in adopting FinTech, while 6% cited marriage.

The study suggests that when a complicated and often stressful life event is on the horizon, banking customers are more willing to look to FinTech for help. That’s true even if they aren’t aware they’re using FinTech in the first place: the study also showed that 63% of all respondents had not heard of the term FinTech—and while 30% of respondents are currently actively using FinTech, only 14% understood that they are indeed using FinTech services.

Marriage

These days, Millennials are waiting to tie the knot, and this cultural shift means the overall marriage rate in the US might drop to 70%, much lower than the rate for Boomers, Late Boomers, and Gen X (91%, 87%, and 82%, respectively). And with money as the leading cause of arguments between married couples, you might expect it to be a serious contributor to today’s trend of delaying marriage.

FinTech Leaders, people who actively seek FinTech solutions, surveyed in the research study, 82% found it difficult to stay on top of their bills. Unsurprisingly, just over half of Millennial couples have discussed their individual spending and savings habits, and only 42% have discussed joint long-term financial goals.

But modern couples do think about financial health in a proactive way, even if they’re still working on bringing it up with their partners. A twenty-four-year-old, for instance, recently relayed her thoughts to the New York Times, saying she and her longterm partner both wanted to finish paying student loans and build a more stable financial future before tying the knot. 

FinTech can help with that. Apps like Citi Mobile and HoneyFi, designed for couples, can aggregate multiple accounts to allow couples to more clearly track their financial well-being. That addresses a major pain point for consumers—FinTech considerers surveyed named “financial account management” as the second-leading issue driving their interest in FinTech. More to the point, HoneyFi and other similar services can jumpstart couples’ difficult conversations about money.

In helping couples better manage their money, HoneyFi and similar apps help them create a more stable financial—and, hopefully, personal—future. But before that, some fun: crowdsourcing apps help wedding guests send money to newlyweds for a dream honeymoon. Once the happy couple has returned from their trip, plenty of other FinTech apps will help them manage expenses more efficiently and transparently. And for major expenses like a home or the wedding itself, FinTech apps—such as LendingTree and Money View Loans—can help them secure loans, comparing offers across providers with an eye toward simplifying the loan process.

Starting a business

Millennials are starting businesses at an unprecedented rate. Many consider it to be one of the most exciting moments of your life, and certainly one of the most stressful. FinTech proves a natural fit for small business owners looking for adaptable, efficient, and inexpensive solutions.

The study also shows that Business Starters are among the most open consumers to using FinTech, especially seeking more efficient payment methods and account management tools. Global payments continue to be top of mind, showing usage rates of 16% in the U.S., 30% in Singapore, and 11% in Australia)—which includes peer-to-peer mobile payments, digital currencies, and international money transfers.

Today’s Business Starters, may be looking to keep overhead low and innovate their way to success in their own businesses. They might also look to rising all-digital banks for solutions. Meanwhile, other FinTech services claim to offer lines of credit and loan management more simply than traditional banks. Kabbage, for instance, touts mobile loan management and no-fee applications as primary drivers for its small business loan programs. 

However modern entrepreneurs choose to manage their small businesses, FinTech can help them streamline their efforts. It’s a new day for anyone wanting to start their own business, and FinTech is here to power the future of business with the future of banking.

Shaping the FinTech future

One of the most exciting things about FinTech is that it’s all still growing. Unlike the traditional banking system, regular consumers have the opportunity to help shape the world of FinTech themselves. That means more of a chance to ensure banking and financial tools that directly address their needs—even as those needs themselves change and develop over time.

Case in point, Canvas designed by Citi, a beta-testing community designed to allow users to help shape the future of banking. Canvas invites users to sign up for announcements about new tests, allowing them to weigh in on new product development. That, of course, means helping to define how users navigate their own financial lives.

True to the innovative spirit of FinTech, Canvas takes a surprising approach to questions of finance. For example: one of its studies has users testing whether we treat money differently when we view our accounts in terms of “Wants,” “Needs,” and “Goals.” Another has users testing whether the number of daily steps someone takes has an affect on how much they spend that day.

Millennials and younger generations will continue to shape our culture, from the ways we marry to the ways we start businesses, from how we view home ownership to how we eat mayonnaise (or don’t). It’s only fitting that this same generation should shape the future of banking with FinTech. Don’t let the future be formed without you.

  • Images |

    Fan Chen

Source: https://mashable.com/ad/feature/modern-life-banking/

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