Article | February 24, 2020
This blog attempts to answer the following key questions at a high level: What could financial technology companies (fintechs) do to enable greater consumer or SME (customer) adoption of their products and services beyond early adopters? What could fintechs do to pull under-served and well-served customers away from incumbent banks and established providers?
Article | February 24, 2020
You heard that right.
It’s not “if” PayPal will replace cash — but “when”. But, where’s this coming from?
Well, we already know 73% spend money via apps.
So, it was time to speak with 200 PayPal and Venmo consumers to understand their shift to mobile app payments. After watching them leave these apps, we sent a survey. And, I can tell you…they think cash is a thing of the past.
Here are 3 reasons why.
Reason #1: It’s familiar.
Branding is the foundation of familiarity.
And PayPal is comin’ in hot — even if 6% of this group isn’t familiar with PayPal. Now, that’s interesting, huh? It may be that Venmo users aren’t aware PayPal owns them.
Either way, it’s not stopping PayPal.
Think about Bandaid and Kleenex for a sec. When was the last time you asked for a bandage or tissue? Exactly. Their brands are so strong, they’re actually nouns now.
If PayPal can reach that level…cash has no chance.
They’ve already got a following…Right now, 66% of the people we spoke to prefer their mobile app payment to cash or credit card. This isn’t a phase either, 8 in 10 people have used a mobile payment app for at least two years.
So, it’s not a trend.
Electronic payment apps are very top of mind for these users. In fact, 43% use a mobile payment app weekly. They’re in such high demand, 34% say it’s very important to have multiple payment apps – an option for every scenario.
Payment at the push of a button.
Speed at its finest.
Reason #2: It’s instant.
This isn’t business, it’s personal.
You love instant gratification, so do I. And everyone loves speed when it comes to money. So, with 94% of the people we spoke to on PayPal for personal use, instant access comes in handy — 49% are here to pay back friends.
Here’s what else they’re doing…
Why are there so many use cases?
Well, it’s simple.
Yes, 72% use PayPal because it’s easy. Think of it this way. You spy a beautiful red sweater online, a must-have. You’re going to buy it. But first, you have to make a choice. You can walk to your purse… and fumble through gum, cough drops, and kid toys until you find a credit card…
Or, you can just log into PayPal.
Maybe that’s why 43% of PayPal users hand over the app at grocery stores, and 42% use it at restaurants and retailers. With more places adding app payments each day, it’s easy to see why the group we surveyed loves it. Already, 52% use it in lieu of cash or credit.
Imagine what will happen when all merchants accept it…
We’ll see the death of cash and credit.
Reason #3: It’s secure.
73% of PayPal users say it’s their go-to payment app. They’re relying on the safety of the app and that’s important.
Why? Well, because 15% choose to use a mobile app payment for its security. If you’ve ever lost a lot of cash or had your credit card stolen, you know how valuable that is.
Peace of mind.
Not only are mobile payment apps familiar, easy and instant — 37% use them because they’re secure. At this point, you may wonder, “if everything is so positive, why hasn’t PayPal already replaced cash?”
Those we talked to, who don’t use PayPal — or other app payment options — as often, can’t because it’s not as widespread. Yet. Give it time and you’ll soon see buyers getting rid of credit cards and killing cash.
It’s a matter of time.
This is what your buyers want.
61% of PayPal and Venmo users believe mobile payment apps will soon replace cash/credit cards. Now is the time to prepare, as cash may not last another 5 years.1 Do the work now, so you’re ahead of the game.
This is market research. You can actually survey the same group of people we spoke to here. Or, grab a whole new group of consumers to dive in deeper, based on the app behaviors you need to understand.
Stay on top. Use consumer behavior to stay a step ahead of your competition.
Article | February 24, 2020
The overhaul of the financial services industry in the post Great Financial Crisis (GFC) era has created a swathe of new rules and regulations for the regulators to monitor, and financial firms to adhere to. While such changes have presented firms with significant challenges, transforming how they operate and behave on a day-to-day basis, it has coincided with another notable overhaul in the tech arena.
Article | February 24, 2020
The Fintech industry is consistently regulating itself since its inception. The industry has become a game-changer since the pandemic caused every consumer to look for convenience in daily transactions. Recent situations have created a necessity for Fintech companies to empower financial institutions as digital transactions soar to an all-time high, with the Indian Fintech sector at the forefront, contributing the highest in CAGR (Combined Annual Growth Report) globally.
According to the market research report of March 2020, Indian and Chinese markets contributed the highest in Fintech adoption rate (87 percent) out of all emerging markets worldwide. These numbers are a green signal for the industry to roll up its sleeves as market researchers expect the Fintech market to reach INR 6207.41 billion by 2025 in India.
As the Fintech world sees an all-time high upsurge, this article covers the list of 5 Fintech trends to look out for that will shape the banking industry. But before that, let's take a look at what Fintech is, and what value it can provide.
What is Fintech
Fintech is an abbreviation of Financial Technology and refers to the emerging technologies in finance that provide improved business solutions to clients, and a convenient way to transact. Fintech helps customers to interact and exchange value with businesses more efficiently.
Fintech is neither a software, nor a brand name. You can describe Fintech as a collection of technological advancements in the financial sector to ease up transactions. Fintech trends help customers do banking in a faster, smarter, and efficient way.
Fintech is on a bull run with the ongoing pandemic covering the finance industry and making users pay without wasting any time or physically being present. With Fintech, financial institutions use technologies like blockchain, artificial Intelligence, biometrics, electronic and mobile payments, etc., to make their business more efficient, helping them interact with their customers effortlessly.
New upgrades and innovations in Fintech allow businesses to integrate their financial accounts with secure mobile applications. Receiving and making payments, alerts, and tracking invoices have become swift due to this integration and allow users to undertake time-intensive activities within seconds. With the help of Fintech, you can sell or buy products and pay for them from anywhere around the world—that is how Fintech is changing the world.
5 Fintech Trends That Are Shaping the Future of Banking
Financial firms are aggressively taking on Fintech
Financial firms and banks are adding new features in their cashless transactions to fit this pandemic-hit economy. Fintech offers convenience to customers as it has multiple options to choose for cashless transactions like mobile wallets, QR codes, contactless payments, etc. It provides a speedy process for payments and digital loans and can create dynamic growth in financial services. This acceleration will continue to groom the investments until banks and Fintech become interwoven. Now, it is just a matter of time for Fintech to emerge as one of the most booming industries.
Blockchain and Big data
Although blockchain and big data are on a bull run, there are miles to go before it enjoys a major slice of the market. This full swing of blockchain and big data may disrupt if challenges like cyber-attacks and fraudulent activities don't get addressed. To help overcome these obstacles, financial services adopting blockchain technologies can utilize Fintech. This implementation will help reduce fraudulent activities, phishing, and cybercrimes while generating trust with the customers. Looking at all the advantages that Fintech offers, banks adopting blockchain technologies will benefit the most out of it.
Artificial Intelligence & Machine Learning
Additional fields where the Fintech industry has to shift its attention are AI (Artificial Intelligence) and ML (Machine Learning), where there is a lot of room for growth. Progressively, Fintech brands rely heavily on AI technologies to reduce costs and monitor transactions closely.
Experts predict AI will lower the cost of financial services up to 22 percent in the next five years. Through Machine Learning, banks can offer ease of use to their customer with speedy transactions, automated trading processes, and secure payment processing.
Providing multiple services on a Single Platform
Instead of downloading a separate app for each financial service, any customer would prefer to have a single platform that can do everything. Many banks have already taken a step to offer multiple services across one app. It may increase the cost of building such apps with powerful API integration, but soon enough, it pays off as most financial services will turn to those banks that offer 'single platform, many features' apps. Some financial institutions may not deliver this kind of app, but the Fintech industry is sufficient to meet their demands.
Fintech becoming 'the new normal.'
The Fintech industry is slowly taking a step towards the general community of consumers. As the need for secure payment processes and easy accessibility of transactions keeps increasing, so does the value of Fintech serving these demands.
Adoption of data analytics will garner a massive Fintech market in the upcoming days. According to market research experts, banks have already started providing financial services with a customized and local offering to their customers by closely watching market movements and data analytics.
What should we expect from here?
As the need to balance the demand and supply of financial transactions keeps increasing, payments and the banking sector need to keep up the speed. It is only a 'wait and watch' game to see to what extent the Fintech market grows.
Frequently Asked Questions
What is the next big thing in the Fintech industry?
AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms.
What's new and trending in the Fintech industry?
Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics.
What are the benefits of Fintech for banking?
Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech:
• State-of-the-art security and compliance
• Better speed in transactions
• Enhanced transparency
• Reduced costs
"name": "WHAT IS THE NEXT BIG THING IN THE FINTECH INDUSTRY?",
"text": "AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms."
"name": "WHAT'S NEW AND TRENDING IN THE FINTECH INDUSTRY?",
"text": "Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics."
"name": "WHAT ARE THE BENEFITS OF FINTECH FOR BANKING?",
"text": "Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech:
State-of-the-art security and compliance
Better speed in transactions