A massive wealth transfer is already underway. The Financial Times reported that in the UK, over £100bn is inherited and gifted every year, while in the EU, by 2030, €3.3 trillion of wealth will have changed hands. There is, also, a surge of new wealth — with the next generation having its fair share of successful tech founders, venture capitalists, and digital influencers.
Given this backdrop, it’s no surprise there’s intense competition across the fintech sector to win over Gen Z. And it’s increasingly challenging to gain their loyalty.
This new demographic of wealth has widely divergent characteristics from their predecessors — they are tech-savvy, digitally fluent, and globally connected. They have entirely different expectations when it comes to financial solutions and wealth management services, demanding speed, personalisation, and borderless solutions.
This shift marks a pivotal moment for the fintech industry, which must evolve to meet the needs of these new clients. Whether they adapt or not will likely have a say in their survival or eventual demise. Here’s why.
Evolving Needs of Modern Wealth Holders
Gen Z embraces a borderless lifestyle. An MBO Partners report found that Gen Z is at the forefront of the explosion of digital nomadism — people who work online and are location-independent. Modern wealth holders also value the ability to make quick decisions and access funds in real-time.
In practice, this translates to products like multi-currency accounts, international investments, and platforms that allow them to make seamless transactions globally. In fact, many of them may be managing their expenses in multiple countries. Hence, to cater to them, services that eliminate bureaucratic barriers are needed.
This can be achieved by integrating key financial functions within a single platform, from analytics and tax planning to philanthropy and value tools that empower young affluent individuals to make informed decisions, with engaging features like educational interactive content.
Additionally, the new generation prioritises social responsibility and environmental sustainability, expecting these values to be reflected in their financial decisions. An EY study revealed that 51% of Gen Z participants considered ESG factors important compared to 36% of people from other generations.
Common Pain Points in the Current Wealth Management Landscape
The current wealth management landscape is still largely dominated by traditional private banks and a few fintech players. However, both still have limitations for the new rich.
Despite the increasing demand for digital solutions, many Millennial and Gen Z entrepreneurs still struggle with the limitations of traditional banking. Private banks offer personalised services and excel at wealth preservation, but due to legacy systems and compliance-heavy processes fail to deliver the agility, speed, and global accessibility that younger, tech-savvy entrepreneurs expect.
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