Millennials form a very significant part of today’s population in the country. Nearly 34 per cent of the total population are millennials, the segment, which is in the core income group of the country, they are aspirational and will carve the future of India’s growth for the next 15 years.
Today’s millennials are ambitious, motivated and want to explore the world; they look at savings from a different lens. People in the age group of 25- 35 years are sounder financially, compared to the same age group twenty years before. In terms of savings, millennials no more today look at only the safe investment options; they try to build their portfolio through multiple tools.
This behaviour change is attributed to increasing disposable income, growing credit accessibility, and easy access to information. While the personal finance segment has grown exponentially in the last few years, there is still a need for increased financial literacy to make the sector more streamlined for consumers. As per a recent report by SEBI, only 27 per cent of the country’s population is financially literate; this indicates the need for increased financial literacy in the country.
Given the rapid pace of digitalization, across the globe and the advent of Fintech companies, several platforms have been helping consumers with financial literacy and awareness about building a diversified portfolio. Multiple personal finance apps have come up, which can track and categorize one’s expenses and investments, help save in a disciplinary manner, and check and improve the credit score.
Many of these apps come with investment guiding tools and methods. Such platforms have been providing a great way to guide consumers with investment options and can be considered a key tool for consumers’ financial literacy. However, millennials should always be alert about the credibility, usage and security of the apps and then opt for them.
Another significant aspect of personal finance, which should never be forgotten, is investing in a balanced insurance portfolio. Millennials need to understand that insurance will not only help in protecting their future and families, but it will create a protection cushion for securing the financial corpus that is being built. Traditional insurance companies and the new age digital insurance companies are working assertively in educating millennials about the importance of insurance and multiple insurance products.
Many digital insurance companies are helping consumers choose the right insurance products through their tech-based platform; guided by an insurance advisor network. Such platforms and models have proved to be significant in improving the insurance literacy rate in the country.
Covid has been a testimony to the importance of building a thought-through financial corpus. People have faced financial crunches, due to sudden job losses, salary cuts; businesses across the globe faced unprecedented challenges. The good side of the coin is people realised the importance of savings and investments to tackle any exigency.
Millennials, who have not been cautious about savings, also started building awareness about saving options. It has been witnessed industry-wide, that financial literacy is extremely helpful in making consumers aware of multiple options- platforms like Fintech apps, authorised Fintech experts, and digital channels have been instrumental in building financial literacy.
Due to increased smartphone penetration and cost-effective internet, millennials in the smaller cities have also been able to garner knowledge about savings and investments.
The trend of financial platforms helping improve savings portfolios for millennials is towards its growth. In the next five years, digital will witness deeper penetration in terms of building financial awareness amongst millennials, not just in the urban cities, but increasingly in the semi-urban and rural pockets of the country.
by, Indraneel Chatterjee, Co-founder, RenewBuy