A new report says that there’s a generational gap when it comes to trusting fintech, with nearly twice as many millennials in Canada saying they trust financial services like mobile payments and robo-advisors as compared to baby boomers.
Mortgage rate and financial comparison company, RateHub, has published its 2017 Digital Money Trends Report, surveying 1,000 Canadians about money matters and their use of financial technologies. The report found sharp distinctions between the generations, with almost twice as many millennials (71 per cent) saying they trust mobile payments in comparison to baby boomers (38 per cent), with generation Xers coming in at 63 per cent.
Lower numbers were across the board for robo-investment advisors but the same ratios prevailed, with 44 per cent of millennials saying they trust robo-advisors vs 42 per cent of gen Xers and only 23 per cent of baby boomers.
“Canada’s major banks have helped bolster consumers’ trust in services like online banking and contactless payments. However, it’s interesting to see that the Boomer generation is the least likely to trust in new fintech services,” said Alex Conde, Director of Content Marketing for RateHub. “This may be because many Boomers have been accustomed to consulting traditional financial institutions and industry professionals throughout their lives.”
The survey found that despite there being more and more financial options competing for customers’ attention, the loyalty bond between Canadians and their primary banking institution is strong. A majority of boomers, gen Xers and millennials have their credit cards and insurance with their primary banks and about half have their mortgages from their bank, as well.
“Canadians are incredibly loyal to their financial institutions,” says the report, “even if they don’t believe they are getting the best available deal. They start building that loyalty early in life when they open their first bank accounts, and it seems that many remain with the same financial institutions … as they get older.”
Evidence suggests that the millennial generation between the ages of 18 and 34 are worse off than previous cohorts when it comes to metrics like financial security and income. “Millennials are doing less well than their parents at the same age, especially in relation to income, home ownership and other dimensions of well-being,” says a recent global wealth report by Credit Suisse, which found that although many countries have rebounded from the 2008 financial crisis— the total global wealth is 27 per cent greater than at the onset of the crisis ten years ago —that wealth is getting concentrated into fewer and fewer hands. In 2001, the richest one per cent on the planet owned 45.5 per cent of the world’s wealth, whereas now that number has increased to just over half at 50.1 per cent.
The 2008 crisis had its impact on millennials especially as many of them were entering the job market for the first time during the high-unemployment years following from the crisis.
The RateHub survey found that whereas only 12 per cent of boomers and 24 per cent of gen Xers said that they received help with their home’s down payment from their parents, 43 per cent of millennials have done so.