The growing numbers of fintech services offering mobile and cloud-based payments are failing to convert older users. One study from Canada found Generation X-ers are over twice as likely to try a digital payments solution as baby boomers.
Financial comparison website Ratehub.ca surveyed 1,000 Canadians about their use of financial services technology for its 2017 Digital Money Trends report. As reported by ITBusiness.ca, the survey reveals a growing divide between older banking customers and their millennial counterparts.
Younger users are far more likely to be interested in new payment solutions. The study found millennials are the most likely to use mobile and contactless payments as their “preferred” option for purchasing goods. They’re also closer to adopting emerging services, such as AI-assisted support bots. 44 percent of millennials said they’d trust a robo-advisor, compared with 23 percent of baby boomers.
Not even millennials are yet fully convinced though. The study found that several lingering concerns are holding back the adoption of fintech services. Privacy, security and trust account for the majority of fears from fintech users.
The majority of survey respondents (61%) said they believe their financial data is “somewhat secure” online, revealing underlying uncertainties. Combined, 22% said their data is “inadequately secure” or “not at all secure.”
The study found online banking has been the most successful technology in earning the trust of users. 85 percent of respondents said they trust their banking application, compared with 59 percent for mobile payments and 38 percent for robo-advisors. Ratehub speculated this might be because internet banking is the oldest of the services so people have grown familiar with it.
Research still important
There are some similarities between the generations. Interestingly, Ratehub discovered baby boomers, millennials and Generation X-ers all extensively research financial products before they start to use them. The methods of research differ though, with 59 percent of millennials referring themselves to family and friends. Boomers prefer to contact their existing financial institution and obtain professional advice, revealing further concerns about the accuracy of online materials.
“A commonality in responses of each generation is the importance of researching financial products,” wrote Ratehub in its report. “Eighty-six per cent of respondents conducted some form of research before choosing a financial product. Whether they use the internet, seek advice from family, or use the resources at their bank branch, Canadians often seek multiple sources of information before applying for a new product.”
The study reveals some of the challenges fintech firms still need to address. If the digital economy is to succeed, everyone has to be involved. Fintech providers need to do more to educate users about their services and encourage customer trust. Although millennials are beginning to accept new finance realities, a degree of wariness persists across all age ranges as the conversation shifts towards privacy and trust.