Faith in FinTech soars as ISA rates remain low

With ISA rates down by 46 per cent over the past five years, the appeal of alternative finance and FinTech investment platforms are on the rise, particularly among millennials|With ISA rates down by 46 per cent over the past five years, the appeal of alternative finance and FinTech investment platforms are on the rise, particularly among millennials

With ISA rates down by 46 per cent over the past five years, the appeal of alternative finance and FinTech investment platforms are on the rise, particularly among millennials

New research into FinTech adoption reveals a strong and increasing investment appetite among millennials. In a survey of over 2000 UK adults commissioned by eToro, one in four 18 to 24-year-olds say they would like to understand shares, commodities and currencies more before making investments, compared to the national average of 17 per cent.

This appetite for greater knowledge about investments is also reflected in this generation’s interest in alternative investment FinTech platforms. Half as many millennials place as much, if not more, trust in these new platforms than traditional providers compared with the national average. According to eToro’s CEO, Yoni Assia, the research accentuates the fact that alternative finance is increasingly viewed as a mainstream option.With so many alternative options, there is no need to accept consistently abysmal rates on savings accounts,” he said. “Cash ISA savings are dinosaur products that time forgot. Low interest rates and changes to savings taxation are resulting in the worst ISA season on record.” 

This trust in new financial services such as social trading, P2P lending and crowdfunding is strongest in London and Scotland, with one in four Londoners and one in five Scots expressing confidence in these digital products. This increased appetite for risk suggests a shift in perceptions among the UK public.. “The traditional financial system conditions people to be afraid of making their own decisions and that investing into the stock market is seen as risky behaviour,” Assia explained.

“While investments can go up or down, studies have proved, time and again, that shares are one of the best long-term investments in the financial marketplace. They tend to outperform government bonds, corporate bonds, property and many other types of asset. When you take a longer view, you can see that stocks can add tremendous value,” he added.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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