It’s hardly surprising that, over the past three years, not much has been said about personal finance services in the media. The world has become completely distracted by other matters – particularly the matters involving big tech, big pharma and big finance.
Digital transformation in the context of banking and financial services has been widely discussed. But the personal finance sector itself is undergoing a transformation.
Technology has created a new wave of customers: millennials and even younger customers are embracing a new era of customer funding, controlled through mobile technology and offering more products and services than ever before are doing.
Time of change for personal finance
Anthony Dimarsico is the CEO of boxes, a fully digital, Belgian banking fintech that enables users to monitor the impact of their purchases on the planet. He points out that many more young people are now interested in investing – a space that was once reserved for the older and upper echelons of the banking industry. Part of this change is due to the growing popularity of cryptocurrencies.
He adds: “Many people, especially young people, are more interested in investing, especially investing in the world of digital currencies. Investing – and DIY investing in particular – has become more prevalent since the first lockdown Probably because it gave people more time to research and pursue things that were once fleeting.
But the current economic environment has also had an impact on the attitude of customers towards their finances. “Inflation and the cost of living continues to rise, reaching record levels, leading once again to people seeking additional revenue streams through digital currencies. Additionally, there is a general distrust of the traditional banking system. This is mainly due to the outdated banking environment and its inability to provide fast and reliable payment options,” says DeMarsico.
New trends in the personal finance sector
green leavesThe demand for integrating services that enable consumers to “unlock” their financial potential and access both cash and crypto has created a huge disruption in the financial services market, said the founder and director of Green Wealth Planning. has done.
“We are seeing an increase in digital investments, such as cryptocurrencies, with a large proportion of investors being Gen Z, as opposed to the demographic of the traditional era of investing,” she says.
“There has been a surge in businesses switching to contactless payments only, which means we are now experiencing the biggest cash crunch. However, this has also given rise to the need for more cyber security; Many companies are required to provide end-to-end encryption to keep consumers’ data secure.”
She also points out that digital transformation has helped the marketer to develop business models that deliver better value while delivering better benefits to consumers. New trends like virtual meetings via Zoom, Teams and Google Meets continue to hold their position as many people prefer the flexible working option.
There is also growing confidence in the use of technology. “People are more confident in using apps to arrange and manage their finances and are less dependent on high street banks to meet their financial needs, resulting in the birth of many budgeting and money management apps. We Consumers are likely to see a lot more new ones in the future because of demand,” says Green.
DiMarsico agrees with Green and points to 17,000 cryptocurrency ATMs operating in the US today. “It is clear that there is an appetite to use crypto in the same way that there is cash, whether it is to pay bills, buy food or use public transportation. The merging of cash and crypto is a trend that is changing the way of payment. will transition to become the future,” he says. “Using a single access platform that bridges the gap between old and new payments brings an assortment of possibilities and allows users to learn how to buy and trade in crypto.”
Political turmoil has created further disruption
“One of the most significant changes in the personal finance sector since the pandemic is the accelerated digitization of risk and compliance functions,” says Stuart Eslemont, global head of legal and compliance at ZEDRA.
He comments on the fact that the industry is facing a very volatile and rapidly evolving environment (regulatory, political, social and criminal). This is forcing companies to be more agile and able to deal with threats, uncertainties, data requests and data analysis, often with challenging deadlines.
Eslemont further said that the recent sanctions in relation to Russia are changing the scenario. “Regulators and other oversight bodies expect to be able to extract and provide data to businesses within a very challenging time frame. Situations like these are time-critical; the potential consequences of inaction can be significant and further increase this risk.” This highlights that investments should be made in appropriate technologies,” he says.
In terms of solutions, Eslemont suggests that businesses try to be more data-driven and try to avoid weaving it together from multiple sources. “Deploying the right digital tools connected to the core system will reduce the need for manual intervention and reduce the risk of manual error.”