The personal finance industry has seen changing trends every year, especially as the technology and its applications continue to develop. But the pandemic has put the spotlight on personal finance. It gained a higher priority as people realized the importance of financial planning and protection, leading many to experiment with digital offerings at a time when physical interactions were restricted. As with several other industries, the personal finance market has also seen a boom in digitization, with existing digital players experiencing an uptick and legacy players rushing to modernize.
The increased awareness of personal finance and the rapid adoption of technology will continue to impact the industry and influence trends to expect over the next year and beyond.
Rise of personal finance apps
Personal finance and wealth tech apps have become commonplace, especially in the last couple of years. The economic uncertainty created by the pandemic led people to understand the importance of strategically managing their personal finances, increasing the adoption of applications that digitize the process of creating and managing wealth.
According to AppsFlyer’s State of Finance App Marketing report, India emerged at the top of the global financial app download market last year with 149 million downloads.
As we enter the new year, personal finance and wealth tech apps will continue to witness significant traction and growth. Many have grown comfortable with the seamless digital experience and are expected to continue to explore additional features and apps that offer a diverse set of investment avenues, from stocks to gold, along with wealth management tips.
Millennials and Gen-Z accelerate digitization
Millennials and Gen-Z are expected to become a significant influencer in the personal finance sector in the coming year.
Both generations are known as digital natives and have been found to be more aware of managing their wealth from a young age. These features will result in increased demand for personal finance apps and digital experiences.
While older generations relied on financial advisors to build wealth, younger generations tend to prefer modern educational means, such as tools embedded in apps or social media. Therefore, personal finance apps will meet these needs by offering wealth management support on the platform itself, resulting in longer time spent in the app.
Essentially, millennials and Gen-Z will become more involved in personal finance and accelerate the digitization of the industry.
Lower barrier to entry of fractional investments
Fractional or bite-sized investing has been gaining traction lately. Previously, when one wanted to invest in an asset, they often had to shell out a significant amount of money which was not possible for many. Now, with the integration of technology in personal finance and the rise of applications, the entry amount is much lower.
For example, an asset as trusted as gold can be part of everyone’s portfolio, regardless of budget, with apps offering digital ownership of physical gold in fractions as small as a gram. Even real estate, which has largely been inaccessible to retail investors due to high ticket prices, can now be fractionally invested.
Fractional investments are expected to attract increased attention and adoption in 2022 as people become aware of the transformations that technology is enabling in the personal finance industry.
Outlook for 2022
India is rapidly emerging as a global leader in fintech and along with the country’s young tech-savvy population, technology will be the main factor influencing personal finance trends in 2022. For example, the integration of new age technology how blockchain opens. possibilities of freehold property and security of finances and personal property.
The year 2022 promises to be an exciting one for all stakeholders in the personal finance industry as it becomes more democratized through innovations suited to a diverse group of people and their needs.
By Ashraf Rizvi, Founder and CEO, Gilded