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Millennials are an important part of the GCC economy. With 50% of the region’s population between the ages of 18 and 34, there is no denying their power. The oldest of these millennials are nearing their peak earning stages – this means that their spending power is significant and businesses need to focus on better catering to them. A study conducted by Visa further suggests that GCC millennials are higher spenders than their global peers. The following facts suggest that FinTech is a key area of focus for GCC millennials and that there is room for improvement:
There are a few ways in which bank could make use of FinTech to create a more frictionless customer experience for millennials:
- Mobile Banking
Most banks already offer mobile banking solutions to customers. However, there is still an opportunity to make the experience smoother and more user-friendly. One way for mobile banking apps to do this is through using biometrics instead of passwords and PIN-codes to access data and process payments. As millennials become comfortable with biometric scanning on their smartphones, they would prefer this added convenience from their banking procedures as well. This would remove the possibility of forgetting a password or getting hacked. Banks also need to focus on creating a comprehensive platform where all solutions are under one roof.
- Alternative Payment Solutions
Most millennials have shopped online and are therefore comfortable with online payment platforms. With this in mind, FinTech companies have created digital wallets – electronic devices allowing users to make electronic transactions. This essentially enables all card details, IDs, driver’s licenses, etc. to be stored on a device such as a mobile phone. Not only does this make online payment easier with everything in one place, but it also means that a mobile phone can be used with help from a near-field communication device in a physical store to make payments. Companies are also experimenting with behavioral AI-based payments. An example of this is India-based start-up – ToneTag, which uses soundwaves to make payments using a mobile phone. Not only does this remove hardware costs for banks, it also provides convenience for millennials in places like concerts and festivals by eliminating the need to carry cash or cards. Another payment solution gaining popularity is chatbot and messenger-based payment. Not only do chatbots provide instant responses, they also feel human-like which adds a personal touch to experiences and meets millennials in their comfort zone. Citibank recently introduced a chatbot that uses Facebook messenger. The bot answers questions about accounts, transactions and balances in real time.
As faith in technology grows, millennials are more comfortable relying on algorithms than human calculations. Robo-advisors, which are digital platforms providing algorithm-based financial planning, are on the rise as a result. Human wealth managers have been using software for portfolio allocation for several years but as the middle man is removed from the process, millennials gain more trust and feel like they are in control. A popular robo-advisor called Betterment currently has $10 billion in assets under management. The service has no minimum account balance and only charges 0.25% management fees, making it simple and affordable.
- Personal Finance Management Tools
Millennials are globally proven to be believers in their own financial management skills. They are comfortable using apps to manage their money. Canadian startup Koho does a great job allowing users to pay bills, transfer funds, track savings and remain in control by providing a range of tools within the same app.
- Digital Currency Solutions
Digital currency, also known as cryptocurrency, allows for instant transactions and easy transfer of ownership. It also makes money secure. Millennials who doubt the stability of the international economy are growing increasingly confident in digital currency and leading global banks and governments are quick to take note. For instance, UBS led a recent initiative where 6 of the world’s largest banks teamed up to launch their own digital currency in 2018. Similarly, the government of Dubai recently announced EmCash – blockchain-based currency that is to be used citywide.