TechFin, a term coined by Jack Ma, founder and chairman of Alibaba Group a while back.
“Fintech takes the original financial system and improves its technology,” said Ma “TechFin is to rebuild the system with technology. What we want to do is to solve the problem of a lack of inclusiveness.”
Financial Services Industries (FSIs) core foundation is their consumers, it should be if they want to stay in business.
TechFin brings that into perspective as it ensures products or services become mainstream. This is achieved through consumers demands- user experience and design are things consumers crave the most when it comes to their products and services.
A technological startup for example has a strong technological heritage and to them finance is just another use case to be explored and exploited whereas for bank, finance is all that they are about and technology is only earning a place due to the fourth digital revolution casing point as to what is really important between the two.
“In the recent years, we have seen a shift from the customer need of trust to access. Customers want access to funds-the convenience of transacting means more to the consumers than trust. We need to embrace first principle thinking while solving solutions,” said Eddie Ndichu, Managing Director – Opera Software AS in the just concluded Fintech Summit 2018 organized by CIO East Africa.
According to survey by consultant Bain & Co. 75 percent of consumers under the age of 25 trust financial services delivered from a technology firm with 73 percent of people age 18 to 34 said they would try a tech firm’s credit card, deposit account, investment or mortgage.
This age limit is also known as millennials or generation Y and generation Z/iGens who have a general distrust toward FSIs due to financial crash and the volatility of the markets.
FSIs should bear in mind that in within the decade millennials will be largest adult segment, according to Deloitte report dubbed “Millennials and wealth management” states whilst being the largest adult segment, millennials are also expected to grow their wealth significantly in the next years. Until 2020, the aggregated net worth of global millennials is predicted to more than double compared to 2015, with estimates ranging from US$19 to 24 trillion.
The report continued to categorically outline the difference between millennials behaviour to the previous generation.
“When dealing with millennials, banks are more and more challenged by the fact that this segment is demonstrating different behaviors compared to older generations. Millennials highly demand and make use of technological advances. Consequently, they consider technology and online platforms an important aspect of financial advice. 57 percent would even change their bank relationship for a better technology platform solution,” added the report.
The generation Y and upcoming generation Z community are the toughest to please, the latter group especially given their lofty expectations. Getting the basics right first would be the priority, user experience, design and basic functionality are a must in today’s world.