Financial app use will increase by nearly two-thirds by 2022 – with boomers the fastest growing demographic. The deVere Group, which operates in more than 100 countries globally, reports that usage of its suite of fintech apps has risen a staggering 65% year-on-year.
Demographically, 78% of Baby Boomer clients (those born from 1946 to 1964) said they had increased their use of fintech tools, such as health technology apps, by 2022. Meanwhile, 71% of Gen X (those born from 1965 to 1980) and 67% of millennials (those born from 1981 to 1996) said the same.
deVere has developed and rolled out a suite of wealthtech apps over the past five years. These include Vault, a global multi-currency e-money and card app; deVere Crypto, a cryptocurrency app for storing, transferring and exchanging major cryptocurrencies, including Bitcoin; Core, an app to monitor your investments in real-time on the go, keeping you informed of news and events that affect investor returns; and Catalyst, among other things, an affordable investment and savings app.
The definition of “wealth technology”, a portmanteau of the words “wealth” and “technology”, encompasses digital solutions that facilitate the processes of various parts of wealth management. Along with digital payments, regulatory technology (regtech), insurance technology (insurtech), among others, wealthtech is one of the sub-sectors of the fintech industry.
Of the data’s findings, deVere Group CEO Nigel Green says: “We were, even pre-pandemic, already in an exciting new era driven by the lightning pace of the digitization of our everyday lives. But like so many areas of our lives, the pandemic accelerated this trend.”
“Now, like never before, people are embracing the convenience of instant, affordable access to, and use and management of their money through wealth technology apps” and “What is clear is that the way we save, invest, spend and manage our money has changed forever and continues to do so rapidly.”
He continues: “Fintech is already the ‘new normal’. This is supported by the figures which reveal that 90% of people in the US now use fintech services – and we expect it to be a similar picture in most other major developed countries.”
With boomers the fastest growing sector of fintech consumers over the past year, Nigel Green notes: “The results debunk the myth that only the ‘digital native’ generations are users of financial technology.
The findings confirm that older generations are increasingly tech-savvy and recognize the huge potential benefits of fintech apps, including saving you time and money, as well as giving you more control over your finances.
Most experts agree that the growth of the wealth technology sector – which includes tools covering tax planning, investments, wealth protection, estate planning, retirement structuring and planning and wider savings – is assured for many reasons, including the availability of and access to the apps.
Another significant driver is the Great Wealth Transfer. Over the next couple of decades, baby boomers, who represent the wealthiest generation in history, will pass more than $30 trillion to their children, who themselves belong to more technology-oriented Generation X and Millennials.
Fintech companies really gained a foothold in the financial services market, as a concept, in the aftermath of the global financial crisis of 2007-2008, when traditional financial companies were in most cases caught off guard by the crash.
Fintech companies filled the gap between what traditional financial services companies, especially banks, offer and what customers now expect, especially in terms of customer experience.
The global wealth technology industry is booming, having had a phenomenally successful 2022, despite funding levels being off the all-time highs of more than $25 billion experienced the year before. But this should be expected given the darker global macroeconomic landscape last year.
However, with a more favorable market and economic outlook for 2023, the wealth technology sector is predicted by most experts to exceed 2021 levels for venture capital, private equity, M&A investment and research and development.
He concludes: “We are witnessing a personal finance revolution and it is driven by technology. – The shift is far-reaching and permanent. The fintech genie is out of the bottle.”
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