In writing this 2030 sure feels like a long way off, but in reality it is not and I suspect that what we are starting to experience today in terms of innovation and technology in financial services will be seen as “business as usual” in the year 2030. It will be part of our social fabric and very likely more the norm than the exception for how we consume our financial services. I also suspect that some things won’t change, like the need for some level of personal interaction when making life’s biggest financial decisions and that we will need to weigh off the benefits of robo vs real. Arguably it will be easier for some, like generation Z, the cohort born after the millennials, who are sometimes referred to as the connected generation. They are used to ready access to goods and services, through Amazon, Shopify, Spotify; really everythingify! But how savvy will they be as consumers when they are so used to translating immediate wants to immediate needs with the swipe of a screen. Will generation Z be patient enough to ask the right questions, to do the required amount of research (not relying on paid for content) and to understand what the best fit for their financial needs is? It has been suggested that they want “banking on the go” and are likely to quickly pass up on financial opportunities if an app is not easy to navigate and information not readily accessible.
Oddly their financial needs are not that different than the generations of the past. In a recent banking journal article, top stressors for generation Z were surprisingly similar to the millennials, finding a job after college and the ability to pay for their education. What differentiates these two generations is that the technology will potentially give the “Zs” quicker access to more financial products to satisfy these needs. What is not different is that they will still desire and may even require some level of personal interaction to help them make these choices. They will also likely to continue to want the same level of transparency and flexibility in how they consume these products but may be willing to trade off a bit of privacy to get quicker, real-time access to products and desiring ones that are tailor made to their particular needs.
As a regulator I will continue to worry about such things like clarity of product offerings, guarding against mis-selling, data security and protection and who should be held accountable in the virtual world. This may all sound a bit old fashioned but these kinds of risks will not go away, even in the more virtual world.
I welcome the financial inclusiveness and extended reach that technology will bring to many consumers of financial goods but worry that we might miss out on opportunities to retain simple solutions and ones that involve a level of personal involvement.
I also know that regulators will continue to struggle with how to look at technology offerings and in deciding what should reasonably sit within the regulatory perimeter. We will likely continue to ponder how we can remain open to technology and being welcoming to opportunities, while being satisfied that the appropriate level of consumer protection is maintained. It is likely that some of the answers for regulators will come in the form of technology itself, adapting our traditional approaches to oversight to rely more on AI and ML to help us wade through complex data sets and consumer information and flag for future risks.
Technology itself will never be the full solution and we need to be careful not to assume that generation Z, and the ones that follow, will want to rely solely on technology to guide their financial futures and that they too may want to be a bit nurtured through life’s important decisions. Making sure that the use of technology and data remains bias free and that there is that right level of human interaction to check that solutions remain ethical and fair should remain high on all of our agendas.