The Millennial Generation and the Future of Finance: A Different Kind of Trust

Trust is still fundamental to the exchange of goods and services, and to the efficient functioning of every financial system. However, a generational shift is underway that is challenging and reinventing notions of trust in financial services.

As millennials, we came of age during the global financial crisis and the sluggish period of recovery thereafter. Our generation is particularly mistrustful of established financial brands and institutions, and coupled with our comfort with new technologies, this lack of fidelity towards incumbents is creating new market opportunities for FinTech players.

Last fall, when we were getting Wharton FinTech off the ground, we were approached by Peter Vander Auwera, the Founder and Curator of SWIFT’s innovation arm called [Innotribe]( Peter was interested in our thoughts about how millennials viewed the shifting landscape in financial services, and we had several phone calls to discuss our theories. Wharton FinTech ultimately partnered with Innotribe to examine how the Millennial Generation will help shape the future of finance, which we lay out in this [white paper]( and we will play an important in this year's Innotribe program at [Sibos](, taking place in Singapore from 12-15 October 2015. 

The paper explores three main themes:
Trust in technology: Millennials trust technology rather than face-to-face relationships and the traditional ‘bricks and mortar’ on-premises user experience. They want entirely new digital products that are relevant to their daily lives. However, there is a fine line between trust in technology and over-reliance on it, and information and identity security is an area of risk that needs to be managed.

Trust in networks: FinTech startups built on the back of social networks have a distinct advantage over incumbents when it comes to customer acquisition. By focusing on user experience and viral or ‘word-of-mouth’ marketing, these young firms are often outperforming their better-funded rivals. For those financial services firms looking to gain market share within the Millennials segment, this is an extremely important approach to master.

Trust in social causes: Millennials demonstrate a stronger likelihood to buy a product from, or indeed work for, a company with a defined social or environmental mission. They trust companies with social or environmental objectives more than those that are perceived as operating solely for profit. While declaring affiliation to a social cause can attract customers and improve engagement, companies must be careful not to mislead Millennials – they tend to do their research to make sure a company’s claims can really be justified. 

Socio-economic and generational dynamics play a critical role in the evolution of financial services. As companies reinvent the way people interact with their money, finance is becoming faster, cheaper and more efficient for individuals and businesses.