As fintech offerings have entered the market, they have primarily been focused on Millennials. Trendy apps targeted towards this audience are still entering the marketplace for everything from stock purchasing to cryptocurrency management to budgeting apps.
But now more than ever, fintech companies should think about changing their focus and appealing to previous generations. Typically ignored by trendy financial companies, individuals who are older could use new fintech just as much as their Millennial counterparts.
Here are some of the ways that fintech companies are beginning to focus on these consumers and things this generation might be looking for in their fintech offerings:
Retirees and Senior Citizens Represent a Growing Market
The Baby Boomer generation, which consists of individuals born between 1946 and 1964, makes up nearly 25 percent of the global population right now. This represents a huge marketing opportunity for fintech startups. Additionally, the Baby Boomers are currently the wealthiest generation by far and expected to remain so until at least 2030.
In fact, in the United States, Baby Boomers hold around 50 percent of the nation’s wealth, compared to the just 5 percent held by the Millennial generation. Some believe that because younger individuals are more tech savvy, they are the natural focus for financial tech companies.
However, the AARP reports that around 70 percent of individuals over age 50 own and use smartphones. Approximately 40 percent of this same group use tablets. It is probably more accurate that Millennials are drawn to fintech companies not because they are more tech savvy, but because these companies are more focused on things that are important to people at that stage of life.
The Baby Boomer generation has unique financial needs that younger generations are not yet focused on. This could explain why most fintech companies are currently seeing more use by Millennials.
However, fintech startups are starting to catch on to this huge opportunity. This means that new applications are entering the market with Baby Boomers’ financial needs in mind. It’s time for that change, and for fintech companies to take advantage of this substantial and largely untapped market in earnest.
What Do Baby Boomers Want?
The Baby Boomer generation, along with members of GenX, are focused on different problems than their Millennial counterparts. These individuals are caring for their aging parents, saving for college for their children, and thinking about retirement.
Retirement solutions at the moment largely ignore changing trends. Traditionally, retirement has been seen as a complete step down from a 9-to-5 job. In some cases, it still is. But more and more, individuals are quitting their main jobs when they reach retirement age, while still continuing with side jobs and other sources of income.
Baby Boomers are also outspending past generations significantly. This means that tools for wealth management will not be discarded as they enter retirement. Instead, they will likely still need help managing their finances. They may intend to travel, purchase big ticket items, or otherwise expend their income during their retirement years. Very few members of this generation are looking to exit the workforce completely, and that’s something that fintech companies will need to understand.
An additional application for fintech companies might include caretakers. As people age, it is not uncommon to have a caretaker step in to help with everyday activities, and that can often include the management of finances. Planning and wealth management tools with caretakers in mind might be a lucrative area for fintech companies to turn their focus in the coming years.
With this move towards having a caretaker or otherwise obtaining assistance for their needs as this generation ages will likely come a move towards end-of-life planning, including inheritance planning, writing of wills, and other important considerations. These are additional markets for app makers to consider.
Changes Will Bring Opportunity
It’s time for fintech to focus on this largely-overlooked subcategory of individuals and start focusing on their unique financial needs if they want to continue to grow and develop. Baby Boomers and GenX have largely been ignored by fintech companies in favor of tech-savvy millennials, but that’s a mistake.
With greater purchasing power and individual wealth, these are the generations with the majority of the money. Getting them to commit to leaving brick-and-mortar financial institutions in favor of startups might be a challenge, but it is possible.
With an increase in education, user-friendly adjustments to existing products, and an increased focus on what these users want and need from fintech, this potentially huge market could easily be tapped and served. Tools for retirement planning, managing investments, budgeting, and other forms of financial planning would be hugely beneficial to this largely underserved market.
Over the next few years, it’s likely that more and more fintech startups will turn their focus to these generations. For example, retirement accounts (largely owned by Baby Boomers) currently hold trillions of dollars in wealth that will soon need to be managed.