Intel Report Core Replacement - Flipbook - Page 10
Financial technology usage during Covid-19
Gen Z and millennials use fintech companies the most, but older financial
decision makers have accounts as well.
Existing users
New users
Gen Z
ages 19-24
Millennials
ages 25-40
52%
34%
Non-users
Gen X
ages 41-56
Baby Boomers
ages 57-75
48%
24%
37%
2%
44%
56%
14%
8%
7%
74%
Source: McKinsey & Co. 2020 survey. Ages have been updated for 2021
41-56), the rate moved up by seven percentage points, jumping to 44%, according to McKinsey
& Co. This reliance on new technology tools by consumers has also seeped into their banking
choices, with many adopting neo or challenger banks, such as Chime, which use technology and
marketing to attract new deposits. While remaining a small sliver of the banking world, 20% of
consumers reported having an account with the neobank Chime in S&P Global’s 2021 Mobile
Banking Survey.
According to Bank Director’s survey, 34% of banks between $1 billion and $10 billion in assets
picked challenger banks that attract consumers among the top three of their biggest threats.
Forty-three percent consider digital, nonbank business lenders among their greatest competitive
threats. Yet neo or challenger banks have a built-in advantage over larger institutions, like credit
unions or regional banks, in one significant way. Due to their lack of size and age, these companies or startups don’t have the decades-old systems that prevent them from adding new features
or benefits. This gives them the ability to easily add tools that users want, when compared to a
regional bank that has a core originally created in the 1980s. Through a more cloud-based structure, there’s less cost to incorporate a new API that connects with another fintech or use their
data analysis to provide automated features based on how users spend. This has led to drift as
consumers seek out the new players, particularly for secondary banking tools.
2. APIs
While the use of fintech tools grew during the pandemic, many banks lack the capabilities to
move with the times. Typically, banks adapt to a new, popular fintech offering by using an API
8 | FINXTECH INTELLIGENCE REPORT
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