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Fintech has to cater to the needs of Millennials

7 Feb 2018 | Rakesh Bhatia

Standfirst: According to Micro-saving and micro-investing apps are the way to go.

Millennials have been accused of disrupting the system. Recently, they were even chastised for squandering their retirement funds on frivolous food like avocado toast, amongst other things.

Millennials belong to the demographic cohort born between 1977 and 1995, otherwise known as Generation Y. This group, which reached adulthood around the turn of the 21st century, grew up in a time of rapid change. Hence, their priorities and expectations are distinctively different from previous generations. They are also typically tech-savvy with short attention spans. They yearn for lasting and memorable experiences as opposed to material goods.

Indeed, a study by travel site Contiki revealed that 71% of millennials, aged 18 to 35 in 2015, cite experiences as the most important thing in their lives, prioritising activities over physical purchases. This might explain why millennials would rather spend money travelling the world than on a house.

Understandably, the spending patterns of millennials inform their saving habits. As with other generations, millennials are generally concerned about financial planning. However, the Manulife Investor Sentiment Index Q4 2016 report found that only 1 in 2 is on track to achieving their financial goals. There is research to prove that more than ¾ of millennials are anxious about their financial future. Evidently, there is a gap in the market in providing the right tools for millennials to save and invest.

Small and simple

Investing is often viewed as a tedious process that involves extensive research and knowledge. Furthermore, investing usually requires a large amount of capital, which millennials may feel that they do not have. For millennials, who are notorious for their short attention spans, investing then becomes highly unattractive.

Cue: micro-saving and micro-investing. These branches of microfinance refer to the acts of saving and investing small amounts of money regularly. Over time, this money accumulates and grows.

A research by Nielsen in 2015 reported that 86% of Singaporeans aged 25-35 years old are willing to set aside $300 a month. With $10 a day, micro-saving can cultivate a habit of saving, and allow millennials to work towards a nest egg they can build upon. By keeping it small and simple, saving and investing becomes something achievable in the eyes of millennials.

App-ify it

As a tech-savvy generation, millennials are early adopters of new emerging technologies, giving rise to share economies with Uber and Airbnb, as well as e-commerce and cashless payments. Transactions no longer have to be made with actual exchange of physical money. Likewise, to encourage millennials to be financially responsible, fintech has to adapt to provide saving and investment services that allow for ease and convenience.

By replacing tedious research with infographics and videos, and paperwork with a tap or a swipe, micro-investing apps then make investing more appealing for millennials. Micro-saving apps can also enter the market by automating savings. For instance, if the user spends $2.70 on a cup of coffee, the app can add an additional $0.30 to round up the amount and channel the $0.30 into the savings account. While $0.30 may not seem like much, every transaction adds up, allowing millennials to save even as they spend.

Automating savings can also take place in the form of algorithms. Take Hektor for example. Launched in Singapore, it the personal finance application is targeted at millennials. By using deep insights from behavioural science, Hektor automates savings to help users reach their financial goals. For example, the app can automatically save $5 every day the user takes public transport instead of an Uber. It can also save $10 every time the user exceeds a time limit scrolling through Instagram. The money saved from these actions can then feed into saving for a weekend getaway or, in the long term, down payment for a house.


With each generation comes a new set of priorities and expectations to which industries have to learn and adapt to remain competitive. Likewise, as millennials demand ease and convenience, fintech has to rise up to the challenge by providing in the form of micro-saving and micro-investing apps.

For more insights on fintech, join Rakesh Bhatia at ConnecTechAsia Summit 2018’s EmergingTech Track, where he will be discussing the opportunities and threats of blockchain and cryptocurrency. Marina Bay Sands, 28 June 2018. Delegates may register for the Summit here.


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