If it seems like fintech is getting a lot of hype lately, you’re not the only one. The CEO of PayPal is expecting the space of financial services to undergo more change in the next five years than happened in the last 30.
One of the major trends driving this change is financial institution’s desire to reach Millennials. And where are Millennials? On mobile.
To serve the Millennial market, PayPal CEO Dan Schulman told CNBC, financial services have to “re-imagine how money can be managed and moved.”
“If you think about the under-30 generation, the millennial generation – GenTech, as I call them,” Schulman said, “They grew up with a screen in front of them. And so they think about everyday processes, like payments, differently.”
Looking at the current personal finance and other fintech applications on the market, from PayPal’s Venmo to Robinhood to Stockpile, it’s easy to see what rising fintechs think Millennials want out of their mobile financial service experiences: something either social, more game-like, or both.
The co founder of BlackRock, the largest asset manager in the world, thinks the key to securing the next generation of investors will be finding a way to turn investing into a game where investors still feel secure, in addition to having both top technology and brand backing that game.
“Millennials want to game. It’s a game society,” Rob Kapito said at the Barclays New Frontier conference in London last Thursday. “Most people use Uber because they’ll say you’ve got the card, it’s already paid for, it shows up — that’s not why people really like it. They love watching the car come get them. It’s a game. All of the technology is gamification.”
There might be something to that statement. Robinhood, the stock trading app targeting millennials, with more than 3 million customers, is rapidly closing the market gap between itself and legacy competitors. Etrade’s customer base, for example, is around 3.3 million, according to Business Insider.
In Venmo, users frequently use emojis as their transactions to denote payment. Schulman said, “It’s really not a P2P service, it’s a social payments experience. And they love doing it. They open the app just to see what their friends are doing.”
While there are a sea of fintechs ready to step up to the plate and meet Millennial needs, Ravi Menon, Managing Director of Singapore’s Monetary Authority, warns fintech investors to be discerning and selective, reports Bloomberg.
When it comes to the actual applications of new technology, like blockchain or cryptocurrencies, everything being marketed might not be what startups can ultimately deliver.
“Financial technology is going to be the future of financial services,” Menon said. “You just have to be discerning — not to be too wide eyed about it, but at the same time, not to be cynical…We should experiment with an open mind.”
“At some point in the current euphoria about fintech, there will be some reckoning,” he said. “But I do hope that it does not sweep away everything…sweep away the good as well as the hype.”
Cadence is a fintech reporter and writer at Fintech Unltd, where she covers the changing landscape of financial technologies. Previously, Cadence interned at Psychology Today, Business Insider and the Wisconsin State Journal. Cadence is interested in how science and technology intersect with power and culture and is curious about the world we are creating for tomorrow, consciously or not. She graduated from the University of Wisconsin–Madison in 2017 with degrees in Journalism and Chinese. Send tips and story ideas to Cadence at [email protected] You can also follow her on Twitter @cadencebambenek.