EY Study: Millennials Pushing Mobile Payments Technology
It would be easy to stereotype and say that the young folks are pushing mobile payment technology.
The stereotype in this case, however, would be right,according to a new study from EY, which revealed that mobile payments users are younger, urban, and often wealthy users.
That’s a noteworthy piece of news on its own, but it was far from all the news the EY study—titled the FinTech Adoption Index—had to reveal. The study went on to note that levels of adoption in financial technology (FinTech) were poised for major growth over the next year, and that was going to mean changes in overall strategic approaches for many banks.
EY further noted that the high rate of adoption in FinTech meant that the probability for “disruption” in the market was very high. This means an opportunity for new firms to enter the market and potentially seize business out from formerly entrenched names in the field.
The study was conducted using just over 10,000 digitally-active consumers across six separate nations—the United States and United Kingdom, Australia, Canada, Singapore and Hong Kong—and found that 15.5 percent of respondents had already used at least two different FinTech services just in the last six months.
Based on that and the numbers who intend to use such technology in short order, that number could double by this time next year.
Several different kinds of FinTech will be in use, particularly mobile payments. Also slated for big use are peer-to-peer payment platforms, online investment advice tools, and insurance-related tools whether for health or car insurance. The biggest gain, however, is expected to come from savings and investment related tools like online stock broking.
However, there’s still a lot of opportunity to be had in this market, as 53.2 percent of respondents in the study noted that they were unaware the products actually existed to use in the first place. That’s good news, because it means plenty of opportunity; just under a third, meanwhile, will be tougher to reach as 32.3 said they had no need to put said products to work.
Trust was a minimal problem; 27.7 percent preferred to use a brick-and-mortar financial institution or services provider, and only 11.2 percent said outright they didn’t trust FinTech in general.
Yes, there’s still a lot of opportunity to be had here. With better than half of potential users not involved because they didn’t know the products existed, and 21.3 percent on top of that staying away from FinTech because they’re unsure of how it works, that’s almost three quarters of respondents that could be reached with a little education.
Even that big block of users who don’t think they have a reason to turn to FinTech could be easily persuaded to do so once they see the value in it. That’s an opportunity for FinTech vendors, from mobile payments suppliers to insurance agencies, to show off the value of convenience, of improved security over cash and debit cards, and even the value of special incentive offers that can be built in.
The millennial users are huge right now, but even among these there’s still opportunity. Throw in the Gen X crowd, the Baby Boomers, and the rest and the case becomes clear.
All FinTech providers need do at this point is make even a halfway decent case, and the rest should be a slam dunk. There’s a great opportunity afoot, and all that remains is to see who will be first to seize it.