Fintech has transformed payments but not savings, says BlackRock’s chief executive

The financial technology boom has transformed the way over a billion people engage with financial services, particularly when it comes to making payments, but Larry Fink, chief executive of BlackRock, the world’s largest money manager, said that no company has yet managed to use technology successfully to get people investing for the long term.

“I believe that if we give more people more confidence about savings, about how to save – like Warren Buffett – then that would transform many societies. I believe one of the reasons global growth is weak is that we’ve got so much money sitting in bank accounts,” Fink said in an exclusive interview with the South China Morning Post.

Fink said there was a need for companies to use technology “to create better financial literacy to assist people to focus on savings for future – the same way we focus on our health or on making commerce so easy”.

“Fear is motivating people to keep their money in cash in bank accounts. If you’re going to retire in 40 years why keep your money overnight. It really is a mismatch. We have not solved that in the west, and we have not solved that in China.”

Both in China, and in Europe and North America, a plethora of investment platforms and robo advisory services are evolving, but none has yet reached critical mass.

Perhaps the closest is Ant Financial’s money manager Yu’ebao, which managed 1.2 trillion yuan (US$170 billion) of assets at the end of the first quarter of this year. However, strict regulation has curbed the fund’s growth, and in August it announced that it would reduce the cap on new investments to 100,000 yuan.