Fintechs and digital financial services – enhancing millennials’ financial management ecosystem

One can witness that contrary to previous generations, there is a leap in the number of young people looking to become entrepreneurs, build their own start-ups. Additionally, many seek to dedicate time and energy towards their passions in addition to working and making money while providing security to their families. Thus one can say that the young generations are more eager to and looking for avenues where their money can work for them rather than just working to make money.

However, the biggest difference between generations and the digital push brought about by the pandemic has been, the handy use of technology. The changing patterns of consumer behaviour and the solutions provided to cater to the same have been evolving in the last 5-6 years where digital adoption of services has grown by leaps and bounds. There has been a swift move from in-person to digital offerings.

With digital and mobile-first leading the way, Fintechs are providing a more personalized experience to best suit requirements, thereby enabling their customers to manage their finances in a more structured and informed manner. Plus digital financial planning also helps save money. For example, investing in alternate investment funds works cheaper than reaching out through a bank agent. Also availing an insurance digitally offers better premium rates (reducing agent costs) while saving on time as this can be done with the click of a button. Similarly digitizing one’s SIPs (systematic investment plan) is not just rapid but the turn-around-time for redeeming it too is quick as it can be done through a click which is especially beneficial during an emergency.

Through digital financial services, one can easily invest, redeem the investment, thus reducing paperwork that an otherwise offline investment option would entail. Also, by investing via digital platforms the investments, profits, and tax can be easily calculated for filing income tax returns. Having access to digital reports and hassle-free management with easy redemption of one’s funds at the click of a button/ tab on phone is very helpful in times of need or switching of investment basis changing goals.

The pandemic has accelerated financial cognizance and a stronger sense of responsibility amongst the millennials. This change in consumer mindset has provided the necessary impetus for the fintech ecosystem to work on products and solutions that will enable millennials to achieve their financial goals. Fintechs are not only facilitating money management tools, monitoring finances or helping in budgeting but also working on mechanisms that will keep the user informed if they tend to overspend. Thus, access to digital financial services will be an enabler for the youth, contributing to their financial empowerment and increased wellbeing according to their imminent and long-term needs, leading to increased financial maturity.

In the near future, digital financial services will become more inclusive, providing a holistic platform for young adults to handle their monetary possessions responsibly and without much hassle. With a robust infrastructure, such platforms will positively contribute to increased resilience of the financial sector and enable individuals to safeguard themselves in times of crisis.