Earlier in 2016, Facebook IQ, a team of researchers, scientists and analysts funded and supported by Facebook Inc., published a white paper entitled “Millennials + money: The unfiltered journey” to evaluate the beliefs and thoughts of today’s youth on traditional banking and financial systems. The paper found that 92 percent of millennials firmly expressed their distrust of banks.
The general population, including millennials, are rapidly developing a sense of awareness towards the manipulation, monopoly and control that banks and financial institutions impose on user funds and money.
Cash is rapidly becoming a store of value of the past, as banks and financial institutions have begun to demonetize fiat money and implement strict controls over the outflow of cash.
Banks don’t understand us
68 percent, the majority of millennials in the study, feel their banks do not understand and thus fail to acknowledge their needs. Outdated bank and financial systems are inefficient and aren’t applicable to modern use cases.
Furthermore, the Facebook IQ team revealed that over 45 percent of millennials would switch from banks to alternative solutions if the latter offered increased functionality, flexibility and efficiency.
The research team stated:
“To start, Millennials want to feel understood. And it matters because Millennials are 1.4X more likely than Gen Xers/Boomers to switch financial institutions. 45% of Millennials say they would switch banks, credit cards or brokerage accounts if a better option came along.”
Fees to store cash
Many central banks and commercial banks in Asia, Europe and the US went as far as implementing negative interest rates, forcing its consumers and clients to pay them fees to store cash, even if it is primarily beneficial for the banks and financial institutions.
Facebook IQ discovered that the majority of millennials across the globe are switching to non-bank alternatives or what the research team calls the “future of financial services.” An increasing number of users prefer to use FinTech services, which have proven to be more efficient, secure and transparent.
The paper read:
“Millennials also feel disconnected from the financial services industry. Many financial institutions have yet to realize that winning over the Millennial generation will require a transformative overhaul—from how each institution views its competition to how it connects with clients.”
Credit cards aren’t helpful
Facebook has a truly convenient platform when it comes to data segregation and information analysis. Using its database and user base, the Facebook IQ research team focused on “working-age millennials” from ages 21 to 34 in the US and affluent millennials of over $75,000 in income, comparing their mindset towards money and banks in comparison to boomers (ages 35-65).
In total, the Facebook IQ research team looked into 70 mln people in the working-age millennials category and 2 mln users in the affluent millennial group.
One of the go-to responses banks and financial institutions provide amid cash demonetization and restriction in the outflow of physical money is that today’s millennials and the general population prefer to use digitized methods of payments.
However, according to the Facebook IQ study, 30 percent of millennials fail to understand the benefits of credit or debit cards and over 57 percent rely on cash to finance both their long-term and short-term day-to-day operations. More importantly, 46 percent of millennials reasoned their usage of credit cards as a method of helping them “build credit,” and stated that they aren’t necessarily using credit cards for comfort and efficiency.
Bitcoin as solution
Bitcoin payment solutions and wallet service providers are by far the most practical and viable alternatives to the millions of millennials and students worldwide. It offers high liquidity, stable global exchange rates and, most importantly, financial freedom and prevention of excessive control from the authorities and central banks.
Once half of the millions of millennials migrate to more innovative and practical systems based on Bitcoin and other non-bank digital currencies, the rest will follow.
Thus, the increasing awareness of today’s youth towards the restricted and limited capacity of banks and financial institutions will ultimately add millions of users to Bitcoin and potentially other cryptocurrencies in the market.