Fintech for Millennials: How Apps Are Catering to the Financial Needs of a New Generation

We’ve been embracing information technology (IT) in various facets of our lives. From manufacturing to healthcare, IT is omnipresent and is revolutionizing the way we perform tasks and operations.

Fintech is one industry that has constantly embraced IT and has tried to provide the best solution to its users. From passbooks to account logins in our mobile banking app, the finance industry has undergone a 360-degree change. Today, we don’t need to go to a bank and fill in a pay-in-slip or withdrawal form. Instead, we open our smartphones, tablets, or computers, and make the transaction within minutes using the best financial apps available. However, the generation that has shown a massive interest in these technologies, and is further catapulting the growth with their innate interest is millennials.

Today with this article, we’d be exploring fintech for millennials. We’ll take about the compelling fintech apps and personal finance apps that have been changing the way we bank, and why the fintech industry has to focus on millennials.

Therefore without leaving any minute, let’s jump on with the topic, and explore it layer by layer…

Who are Millennials and What is their relationship with technology?

Millennials are the population that was born on or between the years 1980 to 1996. This generation is technologically adept since this population has seen the technological renaissance, and is now witnessing the rise of AI. Millennials have seen the launch of Microsoft Windows while Apple Computers already existed. They have utilized floppy disks for storage and are now using cloud storage. They have handled dial-up connections for connecting with the internet and are now surfing with the speed of 5G.

With so much technological revolution undergone throughout the era, it is the perfect generation that understands the nuances of information technology and is well-versed in using them unlike their predecessors (Gen-X). This makes them a suitable target market for fintech mobile apps as the majority of that generation today is earning a living through jobs and businesses. Also, they are looking for advanced ways of monitoring their finances, making investments, and creating wealth.

The Perspective of Millennials — About the Fintech Industry and Fintech Apps

There is no doubt in the argument that Millennials are reliant on technology for various purposes that includes banking as well. A study by Fisglobal states that 32% of millennials are more likely to use a fintech app or neobanks in comparison to Gen-Z (which is 22% for a generation born into technology).

The statement above clearly states that millennials have a positive approach toward technology. This thereby enforces the need of creating fintech products and personal finance apps for the population. This is considering that they are more likely to be early adopters of the tech of any nascent or novel fintech idea.

Key Insights and Market of Fintech Apps for Millennials

As per a report by Expert Market Research, the fintech market was approximately around $194.1 billion in the year 2022. Adding to it, the market is expected to reach $492.81 billion by the year 2028 with a CAGR of 16.8%.

It is a huge opportunity and millennials are a big part of the fintech ecosystem. In fact, a Zippia report suggests that millennials account for 21.75% of the total world population. This is another reason to consider them a strong target market to pitch the personal finance apps, best trading apps, fintech apps, etc.

To further add, here are some factors that add to the growth of the fintech market for the millennial category. These are:

• With global inflation, the cost of living is also rising. This is compelling millennials to seek more savings and investment options
• The number of mobile devices as per Exploding Topics is close to 16.8 billion
• With the increased usage of the internet, the awareness related to the benefits of using fintech applications and personal finance apps is also increasing

Adding to it, there are some key insights that can help you get a better idea regarding fintech for millennials. These insights are gathered by Fisglobal, therefore, let’s have a look at some of the best:

• Millennials are more likely to use and engage in fintech services via social media
• Millennials are willing to try new fintech technologies such as metaverse, neo banks, and more
• More than half of the millennials are likely to use loyalty-based mobile app services

Different Fintech Solutions for Millennials

There are several types of fintech solutions that are available in the market as of now. Let’s check out the ones that millennials can avail of today:

Peer-to-Peer Lending

Peer-to-peer lending also known as “social lending” and “crowd lending” is a way of lending or loaning money between two parties while subtracting the middlemen. It is an alternative to bank loans and other traditional loan methods.

It is a compelling way to loan as it gives high returns to the lender and the capability to customize the different postulates such as tenure, rate of interest, collateral, etc. between the two parties. Right now, there are multiple applications that allows the two involved parties to do that.

Top Fintech Apps for Peer-to-Peer Lending:

• Upstart
• Prosper
• Lending Club

Robo-Advisors

Everyone in today’s day and age wants to be financially independent. However, not everyone has the capacity to pay the fees of a consultant. Robo-advisors are AI-based tools that can be used to grow wealth and make investment decisions. Some of the key services these personal finance apps provide are:

• Portfolio management
• Automated investment of the portfolio
• Performance tracking of the investments
• Financial planning for retirement
• Tax strategies
• Tracking and setting of goals

Top Personal Finance Apps — Robo-Advisors

• Betterment
• Wealthfront
• Personal Capital

Digital Wallets

Digital wallets are fintech apps that remove the necessity of carrying a wallet or physical currency along with you. These wallets are capable of making micro as well as major transactions simply using smartphone devices and an active internet connection. The money is transferred directly from the bank of the sender to the receiver.

Top Fintech Apps — Digital Wallets

• PayPal
• Venmo
• Google Pay

Mobile Banking

Mobile banking is accessing banking services such as fund transfers, money deposits, account opening, etc. using a smartphone or any other computer device. Ideally, each of the respective banks has their own mobile banking app.

Best Personal Finance Apps — Mobile Banking

• Bank of America
• Chime
• PNC Mobile

Trading Apps

These are apps that allow you to buy and sell stocks without a broker. These apps itself acts as a broker while allowing trading using your smartphone or computer. The user can get information about different stocks and their state in the market. In fact, these apps also provide capabilities for day trading as well as long-term investments.

Best Personal Finance Apps — Trading Apps

• Robinhood
• TD Ameritrade Mobile
• IBKR Mobile

Insurance Apps

As the name suggests, insurance apps let you buy insurance, pay premiums, and redeem their benefits via mobile apps. These insurance apps & websites cover multiple facets. Facets such as health, automobile, property, home, travel, etc.

Top Fintech Apps for Insurance

• GEICO Farm
• Jerry
• myCigna

Top Fintech Apps for Millennials in 2023!

We have mentioned some of the best apps for finances as per different niches. However, there are multiple fintech apps that are popular among the community of millennials which we have covered. To further provide you with a concrete list, here are the best personal finance apps and fintech apps mentioned below:

• Acorns: The idea behind the application is exceptional. It takes your spare change and invests it for you. For millennials who don’t have a huge budget, Acorn is an adequate application.
• Robinhood: It is amongst the best trading apps that are out there. It is commission-free and makes the task of buying and selling stocks much easier.
• Chime: Chime is a banking application that offers features like direct deposit, no overdraft fees, and free ATM withdrawals. This is a convenient way of banking.
• Digit: Digit is an AI-based machine learning application. It helps you save money by automatically transferring the money to your savings account when you can afford it.
• Mint: Mint is a highly useful money management app that also makes our list of best personal finance apps. It lets you track your expenditures, set a budget, and help you create & achieve financial goals. It is a recommended application for millennials who have a hard time managing their finances.

Future of Fintech Apps — Trends!

Let’s check out some of the fintech trends that are dominating and will be overpowering in the future market:

Mobile-First Banking

This trend is being followed since the inception of mobile banking. Mobile-first banking entails the provision of banking services on the customer’s smartphone. It intends to make the service intuitive, easy to use, and comprehensive. Aside from this, it also promotes the integration of crypto exchanges, stock brokerages, bill portals, travel bookings, etc.

Behavioral Banking

Behavioral banking aka hyper-personalization is gathering customer insights and based on that providing personalized banking solutions. It is a fintech app trend that works similarly to how apps like Netflix, Amazon Prime, Hulu, etc. provide content to their customers.

Visualization of Data

It is another trend that is being followed by fintech services to entice customers. However, it’s not just fluff and show. These visualized insights related to banking behavior are easy to understand. This provides a real-time state of the finances of the customers, thereby, helping them to make informed financial decisions.

Conversational Support

Providing effective support to customers has always been the number one use case that fintech services have to handle. However, the customers of today want a more personalized experience from chatbots. With the inception of AI models like GPT, the future will be seeing a host of banking chatbots that will solve customer queries with ease. Adding to it, they will also adapt the tone of the customers.

Social Banking

Also traditionally referred to as “Sustainable Investment”, it is a type of banking that has existed since the 1950s. It is identical to peer-to-peer lending, however, this is primarily carried out via social media platforms.

Wrapping Up!

It won’t be wrong to actualize that almost every person will be using some sort of fintech app via their smartphones today. Millennials stand out in this department because the entire population today belongs to the working class unless they are unemployed. Millennials came into a world where the majority of tasks were being completed manually.

However, with the integration of IT services and the revolution of fintech, they adopted fintech solutions in a blink of an eye to saving the hassle of physically going to a bank. With AI in these contemporary times, we are already witnessing new solutions that offer personalized banking capabilities. Adding to it, there is a lot more to come, things that we can imagine and things that we cannot.