Fintech
Meet the 3 New Types of Fintech Consumers and Their Banking Needs
- Digital natives want financial institutions to provide cutting-edge, instant solutions.
- The motivations, needs, and desired solutions vary greatly among the three different groups of digital natives.
- Card issuers must anticipate and exceed the ever-changing demands of consumers.
Fintech is not just a buzzword: it has become a standard or even a primary tool for our banking operations, according to Visa’s 2024 Global Consumer Segment Analysis.
As a result, digital natives expect financial institutions to move away from the traditional and provide cutting-edge, instant solutions. These savvy consumers aren’t tied to a specific provider. They manage seven to eight accounts across checking, savings, and retirement. They also use multiple digital apps and even multiple providers for exchanging cryptocurrencies.
While digital natives are open to a variety of financial solutions, they are far from uniform in how they approach financial technology. For card issuers, staying relevant means choosing partners who resonate with tech-savvy customers. Visa’s recent Global 2024 Consumer Segment Analysis surveyed more than 13,500 consumers worldwide and found three distinct profiles.
To be relevant to this demographic, you must first understand the subtle nuances that distinguish these three different groups of fintech consumers.
Pioneers of FinTech: The Big Spenders
Affluent young consumers are embracing a variety of payment methods, from cryptocurrency accounts to cross-border payment accounts. The technological revolution in banking is allowing these “Fintech pioneers” to accumulate benefits and manage their finances efficiently, without disrupting their lifestyles.
FinTech Pioneers (average age: 33) are an affluent group. Compared to other consumers, their spending is much closer to indulgence than essentials. Splurging on restaurants, travel, and concerts satisfies their need to impress others. Their lifestyle attitudes focus on both the interior and exterior. Three-quarters look for ways to improve themselves. A similar percentage are willing to pay more for sustainable products.
Fintech pioneers want the latest and greatest. A whopping 81% love trying new forms of payment. Most (54%) prefer using digital wallets and apps, while a small percentage prefer credit cards (15%) and travel accounts/cross-border payments (10%). These payment methods appeal to pioneers because they are new and come from brands that pioneers want to support. They also value efficiency and points/rewards.
Digitalists Seeking Rewards: A Mix of Luxury and Pragmatism
The oldest of the three groups, with an average age of 38, Reward-Seeking Digitalists meticulously track their income and expenses to control their spending. However, they are not overly cautious about those expenses. They want to balance a touch of luxury with their pragmatism. They are an “in the moment” group, preferring products and services that offer the most immediate value and benefit.
Reward-Seeking Digitalists’ approach to banking is a mix of old and new. While these consumers rely heavily on traditional savings and retirement accounts, 86% are completely comfortable with their digital accounts. Lifestyle considerations are also key to them. They place an even higher value on personal improvement than Fintech Pioneers, with 81% of Reward-Seeking Digitalists citing it as an important attribute. Three-quarters of consumers in this group want to buy products from brands that support worthy causes.
Their preferred exchange methods are debit/prepaid, favored by 55%, followed by credit cards (16%) and debit/prepaid (10%). Reward-seeking digitalists appreciate the simplicity, convenience, speed and security of these methods, as well as the rewards and points they earn.
Tech-savvy pragmatists: simple and direct without skimping
Tech-savvy pragmatists, who average 35, remain vigilant about their finances. They manage their spending in small increments, preferring simple, straightforward solutions that consolidate their accounts in one place. Nearly three-quarters (72%) like to plan everything in advance. But planning doesn’t mean skimping. Sixty percent of this group believe that “money is for treating yourself now.”
Like reward-seeking Digitalists, tech-savvy Pragmatists prefer the simplicity and convenience of checking and savings accounts. For many, these accounts are where their savings and income are stored. They don’t want to constantly check for new fintech solutions or risk running into technical issues that could jeopardize their finances.
This group of consumers prefers to use debit/prepaid cards (33%), digital wallet/app (26%), and cash (16%). The combination indicates their adoption of age-old methods of exchange while being open to fintech and new payment methods.
Keeping up with fintech consumers
As digital natives continue to expand both their wallets and their expectations for the financial solutions they use, card issuers must anticipate and exceed their demands.
In the new era of banking, understanding these dynamic customers and designing around the most digitally savvy customer segments is critical. Issuers need a partner that enables them to implement agile services and technologies, leveraging the power of data analytics, personalization, artificial intelligence, and world-class security.
Look for a partner that provides a rich ecosystem of capabilities that digitize the card experience, create compelling customer journeys, and deliver world-class content, such as high-value benefits. Having access to digital-first tools built on an easy-to-integrate network will allow you to react and change as quickly as the increasingly demanding customers you serve.
Learn more from Visa Global Consumer Segment Analysis 2024.
This post was created by Insider Studies with Visa.