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More Than Half of Millennials Happy to Opt for Digital-only Banks

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Global Banking - Investors King

More than half of millennials are happy to switch to or already have a digital-only bank, reveals a new poll from one of the world’s largest independent financial advisory and fintech organisations.

The results from a deVere Group global poll of 550+ clients born between 1980 and 1996 show that 59% of those surveyed already only ever use digital banking services or are planning to make the switch to do so this year.

The respondents are clients who currently reside in North America, the UK, Asia, Africa, the Middle East, East Asia, Australasia and Latin America.

Of the poll’s findings, Nigel Green, deVere Group CEO and founder, says: “This is more bad news for traditional banks, which seem to have been in a perpetual game of ‘catch-up’ in recent years amid evolving customer expectations, regulatory requirements and tech advances.

“The poll’s findings are a big deal for old-school banks.

“Why? Two reasons: first, millennials because they’re the fastest-growing cohort of clients; and second, because they are becoming the beneficiaries of the Greatest Transfer of Wealth in history.”

According to some estimates, $68 trillion in wealth is to be passed down from the baby boomers – the wealthiest generation ever – to their children and other heirs (millennials) over the next few decades.

Mr Green continues: “Millennials have grown up on technology. They are ‘digital natives.’

“They’ve been influenced by the enormous surge in tech as they came into adulthood – which came around the same time of the global financial crash that hit in 2008.

“Against this backdrop, they seemingly became comfortable using fintech [financial technology] to help them access, manage and use their money rather than using a traditional bank.”

Indeed, according to a Facebook white paper entitled “Millennials + money: The unfiltered journey,” 92% of millennials distrust banks and many view them as an unreliable source of information.

“Mobile-first millennials expect easy, immediate access and control of their finances in the palm of their hand. They demand to be able to transfer money and pay bills in one tap or swipe. They want to be able to review their spending habits, be offered guidance, and have real-time access,” says Nigel Green.

“In most cases, ‘too big to fail’ traditional banks are struggling to keep pace with the tech innovations that are now driving shifting customer expectations.  Legacy technologies and clunky business models are presenting considerable transformation challenges.”

As well as the on-the-go convenience, control and flexibility that digital-only banks offer, clients are also attracted by their green credentials.

Last year, the deVere CEO noted: “Individuals and companies are increasingly embracing and expecting green, paperless banking.

“This is partly fuelled by the pressing need for us all to drastically reduce waste and better protect the environment – something the pandemic and issues such as raging wildfires has collectively focused minds on – but also because a paperless system is, typically, a more convenient and efficient one.

“Traditional banks have a long way to go to catch-up with tech-driven challenger banks and fintech firms, which are intrinsically much greener and are leading the charge to a paperless future.”

Mr Green concludes: “Mobile-first millennials’ world view, in many regards, has been shaped by tech.

“It’s natural that they turn to fintech instead of a banking system that they perceive as outdated and/or untrustworthy.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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DLM Capital Group Announces Winner For its 2021 Pegasus Fintech Challenge

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Pegus Fintech - Investors King

Leading Developmental Investment institution, DLM Capital Group through its digital banking subsidiary “SOFRI” has announced EazyChange as the winner of the first edition of its Fintech pitch competition tagged- Pegasus Fintech Challenge. The front runner EazyChange who emerged winner is a fintech startup with focus on creating easy cash payments for transportation in Nigeria. OgaPOS emerged as the first runner up, EsusuAfrica as second runner up and Friendsvow as the third runner up.

The pitch event which was held on Wednesday 28th of July 2021 at the DLM Capital Group headquarters in Ikoyi  saw the finalists present their pitches to the panel of judges which consisted of the Group CEO, DLM Capital Group, Sonnie Ayere; Managing Director of Links Microfinance Bank, Funsho Idowu; Chief Executive Officer of Cowrywise, Razaq Ahmed; Chief Operating Officer of TeamApt, Tobi Amira; Team lead Design and Innovation Lab at Africa Fintech Foundry (AFF), Omolola Tunde-Alade; and Senior M&A Executive at Interswitch Group, Victor Sada who represented the Group’s CEO, Mitchell Elegbe.

Pegasus Fintech Challenge - Investors KingTeamApt’s COO, Tobi Amira expressed his satisfaction with DLM Capital for organizing the challenge.  “It was a delight to sit as a member of the judging panel for the 2021 Pegasus Fintech challenge. The program aligns with our objective as an organization to encourage innovation and creativity in the Nigerian fintech landscape. It was particularly exciting to see and listen to young Nigerian founders who have come together to build solutions aimed at improving the lives of individuals and businesses in Nigeria for the better. I must also commend the organizers of this pitch for making an effort to promote and encourage innovation through funding and support. It’s our hope that the winners would put the funds to good use and bring all their fantastic ideas to reality”.

The Managing Director of Links Microfinance Bank, Funsho Idowu commented in his closing remarks that the ‘Pegasus Fintech Challenge was a huge success, and we are happy to provide this support to fintech startups in Nigeria as a way of enabling growth in the industry. We look forward to hosting subsequent editions with strategic partnerships from other players in Nigeria’s financial sector.’

The Pegasus Fintech Challenge was executed in partnership with tech accelerator, African Fintech Foundry and is a part of DLM Capital’s commitment to accelerate seed funding and investments in the Nigerian fintech space. The Fintech pitch event had 35 submissions where the top 5 finalists emerged for the pitch day event.

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SWIFT Launches SWIFT Go, a Fast, Cost-effective Service for Low-value Cross-border Payments

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New service enables businesses and consumers to send payments in seconds with full transparency and strong security; SWIFT Go is a key building block in the co-operative’s strategy to enable instant and frictionless cross-border transactions; Seven leading global banks already live with the service.

SWIFT today announces the launch of SWIFT Go, a transformative new service that enables small businesses and consumers to send fast, predictable, highly secure, and competitively priced low-value cross-border payments anywhere in the world, direct from their bank accounts. Seven global banks, which collectively handle 33 million low-value cross-border payments per year, are already live with the service.

SWIFT Go enables financial institutions to offer a seamless payments experience for low value transactions often initiated by small- and medium-sized enterprises (SMEs) to pay suppliers overseas and by consumers sending money to friends and family internationally. Using tighter service level agreements between institutions and pre-validation of data, SWIFT Go enables banks to provide their end customers a fast and predictable payments experience with upfront visibility on processing times and costs.

The SWIFT Go service builds on the high-speed rails of SWIFT gpi, which have transformed the speed and predictability of high-value payments. The service marks another milestone in SWIFT’s strategy to enable instant and frictionless transactions from one account to another, across SWIFT’s network that connects more than 11,000 institutions, and 4 billion accounts across 200 countries worldwide. It will further strengthen the capabilities of banks to serve their customers in the high-growth small business and consumer payments segments.

Stephen Gilderdale, Chief Product Officer, at SWIFT said: “SWIFT Go is a further step towards achieving our vision of enabling anybody, anywhere, to send money instantly and securely around the world. The new service is a direct response to the needs of small businesses and consumers for fast, easy, predictable, secure and competitively priced cross-border payments. Our new service will allow banks to compete effectively in one of the fastest growing segments of the payments market, delivering a seamless experience for their customers.”

SWIFT Go was developed in close collaboration with the global SWIFT community and is underpinned by several key pillars:

  • Speed: Tighter service levels between banks increase speed. A single payment format increases straight-through processing, while services such as pre-validation remove frictions that cause delays.
  • Predictability: The amount, time, fees and FX rate of a payment are known in advance. The sender and receiver of a payment can track the status in real-time.
  • Easy to use: The user experience is simple and streamlined, with data requirements known upfront. Strict network validation provides for easy initiation and processing of SWIFT Go payments
  • Competitive prices: Processing fees are agreed between financial institutions upfront so they can provide their customers with full transparency; increased straight-through processing further reduces processing costs.
  • Security: Senders and receivers have peace of mind that payments are underpinned by the strong security of the SWIFT network. Seven leading global banks are now using SWIFT Go live: BBVA; Bank of New York Mellon; DNB; MYBank; Sberbank; Société Générale, and UniCredit.

    Raouf Soussi, Head of Enterprise Payments Strategy of Client Solutions, BBVA said: “BBVA is very excited to be one of the first banks to sign up to SWIFT Go and we recognise the potential of this solution to revolutionise the way SMEs and consumers move money around the world. We have listened closely to our customers and we know how much they value a secure service that ensures payments reach their destination quickly and seamlessly.”

    Isabel Schmidt, Head of Direct Clearing and Asset Account Services Products, Bank of New York Mellon said:  “It’s no secret that for many years consumers and small businesses have been running into varying pain points when transacting international payments. These challenges have included opaque costs and lack of certainty on how quickly funds are delivered to the final beneficiary. This is why BNY Mellon is pleased to be the first US bank to go live with SWIFT Go, a new service that overcomes all of these challenges and assists financial institutions in delivering a competitive, seamless, fast and predictable payments experience to their customers.”

    Feng Liang, Deputy CEO, MYBank said: “SWIFT gpi has become the benchmark for high-value cross-border transactions and we are confident that SWIFT Go will be equally as transformative for SME payments. By providing for instant, seamless transactions within one of the highest growth areas of our industry, we expect that adoption of SWIFT Go will be widespread and that it will quickly be established as the industry standard for lower value transactions.”

    Jean-François Mazure, Head of Cash Clearing and Correspondent Banking, Société Générale said: “As customer expectations for faster payments evolve, the correspondent banking industry requires a solution to more competitively process SME and consumer payments. SWIFT Go fits perfectly with it, allowing us to provide an outstanding experience to our customers with predictable, seamless, and frictionless low-value cross-border transactions reaching beneficiaries accounts quicker than ever.”

    Raphael Barisaac, Global Head of Cash Management, Global Co-Head of Trade, UniCredit said: “UniCredit has long been a keen supporter of innovations within payments that deliver excellent outcomes for end-customers, and as such we are very proud of our involvement in SWIFT Go. This is a service that will lead to real benefits for SMEs and consumers, allowing them to enjoy the speed, predictability and transparency that SWIFT gpi has brought to high-value transactions.”

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Contactless Card Transaction Values to Reach $2.5 Trillion in 2021, Dominating the Contactless Landscape

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naira cards - Investors King

A new report from Juniper Research has found that global contactless card transaction values will reach $2.5 trillion in 2021, from $1.7 trillion in 2020, with cards retaining the majority share of overall contactless transaction values at 79% in 2021. The pandemic has significantly accelerated an existing contactless card usage trend, and these value increases will be sustained beyond 2021 and into the future.

The new research, Contactless Payments: Trends, Opportunities and Market Forecasts 2021-2026, found that the combination of accelerated card issuance and usage during the pandemic with a series of global transaction limit increases have unlocked significant growth potential for contactless payments, fundamentally changing the payments paradigm.

Significant Growth in Previously Underdeveloped Markets

The report identified that market growth has already been catalysed by increased contactless card use in previously underdeveloped markets such as the US and Germany, and that this shift will be permanent. The US will see transaction value growth of 136% between 2020 and 2021, with major US retailers rolling out contactless acceptance and consumers enjoying the added convenience offered by touch-free card payments. Consequently, the US is anticipated to see further growth of almost 300% over the next five years.

Research author Susannah Hampton added: ‘Markets such as Germany have seen an unprecedented shift towards contactless cards in the past 18 months. This shift has severely diminished the role of cash and created significant opportunities for card issuers to gain market share.’

The Opportunity for Biometric Cards

The research identified that recent pandemic-driven contactless transaction limit increases have provided opportunities for biometric payment cards to tap into the trend towards secure, convenient, and hygienic payments. Although still niche, biometric cards are set to see more extensive pilot schemes and wider deployments; offering an increased value proposition and presenting a way for banks and issuers to provide an innovative offering and differentiate themselves from the competition.

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