There are some big and exciting things currently happening in the financial services industry, from new retail to crypto. Let’s explore some of your biggest questions about trends and changes in the financial services space in 2022.
What’s behind the sudden influx of new retail?
New retail is a delivery model in which offline, online, logistics and more are integrated to improve the customer experience. New retail digitizes the whole retail value chain to deliver greater value to merchants and customers. This model has become increasingly common in recent years and is likely to continue rising in popularity due to the tremendous benefit to everyone involved.
Companies that utilize the new retail model can pull data from various sources to make more accurate sales forecasts. By gleaning information from both online and offline channels, these companies can better understand consumer behavior, which, in turn, enables them to create a better shopping experience for the customer. Some new retail companies are even leveraging AI to get the most out of their data, and this data will become even more accurate over time as retailers improve their predictive techniques.
Another advantage the new retail model brings is matching inventory with forecasted sales. New retail differs from traditional sales forecasting in that predictions are based not only on sales history at a single location but also on sales across channels. They might also look at what’s happening on their social media platforms to gauge consumer interest.
New retail takes a holistic approach to the sales process, analyzing relevant factors from every angle, which is why more retailers are adopting this model. They drive greater value through accurate forecasting and can thus provide a more integrated shopping experience for consumers. While this model is still being developed, it is likely to play a significant role in the retail commerce space going forward.
How do crypto trends stack up against traditional stock trends?
Digital currencies, or cryptocurrencies, are popping up everywhere. They are currently worth about $2 trillion, with the largest share attributed to Bitcoin. The crypto boom has many investors wondering whether to continue investing in traditional stocks or focus their efforts on digital currency. The main difference between the two is that you’re buying a portion of a company when you purchase a stock. In contrast, when you buy cryptocurrency, you’re just purchasing cryptocurrency—making it, in some ways, a riskier investment.
Investors know it’s vital to assess ROI and determine what will get the most bang for your buck. The truth? There isn’t necessarily a right or wrong answer for crypto vs. traditional stocks, as so much depends on what you’re hoping to gain and what you can afford to lose.
One significant downside of crypto is that, unlike stocks, its valuation is solely dependent on the purchasers. For a stock to be successful, a company must perform well; for your crypto investment to pay off, more people need to invest in it. In this way, crypto aligns with “The Greater Fool Theory,” or the idea that you can buy an overvalued asset and sell it down the line because there is always someone willing to pay a higher price than you bought it for.
There are still plenty of reasons to invest in crypto. There is a growing interest in digital currency, and what you invest in today can pay off tomorrow. Investing in crypto is also a great way to diversify your investment portfolio. On the other hand, if investors who are looking for a more stable investment understand that traditional stocks might be the way to go.
What groups of people are some of the newest investors?
While past investors tended to be upper-class people with loads of disposable income, new investors come from much more diverse backgrounds. In 2020, FINRA found that the most recent retail investors were young and had lower incomes than more experienced investors. It also found that around two-thirds of the investors who opened an account that year were under 45 and previously did not own a taxable investment account.
These trends are relatively consistent with investors in other industries as well. As a general rule, the newest investors are young, lower to middle class, and come from racially diverse backgrounds. They are also much more tech-savvy than their older counterparts, using social media to learn about investing and stay up to speed on the latest market research.
New investors are 14% more likely to own crypto and three times more likely to use mobile apps as their primary means of buying and selling stocks. Perhaps most notably, new investors are more conscious of diversification. They understand the importance of having a variety of investments in their portfolio, such as mutual and index funds. These new investors find the right balance between what they want to gamble and what they want to put away as savings. They are learning from the mistakes of older investors and are keeping abreast of the latest trends in the space.
What’s happening with 401ks?
There are many emerging trends in the 401k and retirement space. One of the major drivers is an increased awareness of financial wellness. The pandemic forced 401k holders to assess liquidity features, seek better budgeting, and more. They have become more conscious of their long-term financial stability and are looking for new ways to safeguard their money.
In addition, they are trying to juggle student debt with their retirement plans. Employers are likely to offer more flexible 401ks so that workers can continue paying off their student loans while still contributing to retirement. Personalization is also rising as more and more account holders seek customized solutions to their retirement needs. They are also increasingly turning to automated solutions to enroll in plans and stay updated on required tasks.
Encouragingly, recent data shows that, despite the challenges associated with saving for retirement, Americans remain committed to investing in their 401k plans. Even as COVID took the world by storm in 2020, only 3.4% of plan participants withdrew funds from their accounts in the third quarter. This statistic bodes well for 401k trends in the near future.
How agile insights can help
As the financial services industry adapts to new trends in the space, they are looking for fresh, innovative solutions to serve the needs of their customers. You can leverage agile insights in several ways to deliver deeper insights into financial trends so that businesses can make decisions aligned with what consumers want and what they need to grow as a company. Agile technology can help them utilize data and remain competitive, allowing them to make better market predictions and weather the winds of change.
The experts at aytm can help you make the most of your agile data, delivering high-quality market research to stay on top of all the latest trends in finance. Want to learn more about how you can leverage our agile market research solutions? We can help you get started!