What is fintech? Fintech refers to the latest generation of technologies revolutionizing the financial system, including blockchain and cryptocurrency; mobile transactions; innovative investment services; and the use of machine learning, artificial intelligence, or other big-data analytics approaches, to develop more meaningful predictions and insights.
There is no doubt that the world of fintech has pushed our lives forward in ways big and small, from peer-to-peer payments to mobile banking to online bill pay and beyond. And the share of consumers using these tools continues to grow. According to a report by Plaid and The Harris Poll, the percent of U.S. consumers using fintech has grown from 58% to 88% since the start of the COVID-19 pandemic.
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Three-quarters of U.S. consumers (76%) say the more they use digital tools to manage their money, the more they trust them. ►
According to a recent eMarketer survey, by the end of 2022, nearly half of Gen Z consumers will have used buy now, pay later (BNPL) to fund an online purchase at least once during the year.
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According to The Financial Brand, millennial consumers now have an almost equal level of trust in nonbank financial providers as they do in traditional financial institutions. In fact, millennials as a generation are the most willing to store balances in fintech apps such as Venmo, Starbucks, Robinhood, Coinbase, Digit, and Uber.
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63% of Gen X and baby boomers feel that investing in digital assets such as cryptocurrency could result in major losses, and remain wary of doing so. As of now, digital assets remain a fad, not a popular form of investment for this cohort.
Since the start of the pandemic, a larger percentage of Black consumers have opened fintech accounts than their white counterparts. Black financial decision makers are 6% more likely to report being very satisfied with their fintech accounts than with traditional banking channels.
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Black and Hispanic adults are more likely than white adults to say they own cryptocurrency, at 30% and 28%, respectively, a reflection of the desire for better ways to pay and grow wealth among these traditionally financially underserved populations.
Fintech companies are targeting specific consumer segments with new personalized tools and products that better meet their needs and preferences. Daylight is a digital bank designed for the LGBTQ+ community. It issues debit cards with the name customers identify with, rather than requiring a legal name, and has an analytics tool to rate the queer-friendliness of businesses to help users decide how and where to spend their money.
According to a survey by U.S. Bank, nearly half of consumers said health care was the most difficult industry in which to make a payment, with 28% saying they wished health care were more like the banking industry when it comes to payment types and payment options.
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28% of consumers wished health care were more like the banking industry when it comes to payment types and payment options.
Launched the first health and wellness credit card with which consumers can receive up to 5% cash back when spending on things like gym memberships, fitness equipment, and more.
Features a consumer-facing enterprise platform that promises to reduce administrative and billing friction, leading to better outcomes for providers, payers, and the people they serve.
Has introduced the first health care payments engine designed to allow patients to securely submit payments to all their providers across one simple workflow and user interface. For providers, this means easy collection and improved economics.
While “tech” has always been inherent in fintech, the tech industry is expanding services and entering the space in innovative ways.
Apple has acquired Credit Kudos, an open-banking startup that helps lenders make better credit decisions by providing them personalized financial insights with the hope of building momentum for Apple products such as Apple Pay and Apple Card.
From payments and lending to insurance and cash deposit, Amazon continues to innovate its fintech products to drive growth with both buyers and sellers.
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Banks are experimenting with identifying potential customers, onboarding them through crypto wallets, and providing them payments and lending services.
TerraZero offers “metaverse mortgages” for clients who wish to buy real estate in the metaverse.
Industrial Bank of Korea (IBK) is expected to enter the Cyworld metaverse platform to offer a range of financial products in the virtual market. They see the metaverse as an opportunity to address new customer segments like creators, gamers, and artists—aggregating multiple sources of income, instant loans, income smoothing, financial planning, concierge services, and more.
We’d be remiss not to highlight a few of the interesting trends happening at the heart of fintech in the financial services space.
Penelope is an intuitive cloud-based 401(k) platform. According to the company, there are no 30- to 40-page documents filled with complicated jargon, and the content is brief and to the point and uses plain English. To appeal to different learning styles, content is provided in text and “FinTok” videos.
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According to TechCrunch, $120 trillion in B2B transactions are occurring via check, wire, and ACH today. For accounting teams and employees alike, the need to modernize these processes is a necessity ... enter fintech. Companies like TripActions, Expensify, Divvy, and more are providing safer, faster, more-convenient tools than ever before, revolutionizing the expense management space.
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SmartHop is a startup that provides a smart dispatch service and fintech products, like a fuel card program that offers fuel discounts and other perks, and various insurance offerings.
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Tomo, a startup founded by former Zillow execs, aims to be a “PayPal for the mortgage industry,” offering both underwritten preapprovals and verified preapprovals, which do not require a hard credit inquiry and can be completed in three hours.
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Milo has announced its new crypto mortgage. This is the world’s first crypto mortgage offering that makes it easy for crypto investors to use their digital assets to purchase U.S. real estate.
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Current targets younger consumers with their value proposition of providing a “hybrid finance” approach that mixes decentralized finance (DeFi) and traditional finance tools. For instance, instead of relying on financial institutions as intermediaries for peer-to-peer transactions, they use technology that relies on blockchain recordings and stablecoins.
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We partnered with Spave—an app allowing users to save and donate to the causes they care about—delivering insights, guidance, and brand development bringing the product vision to life.
We partnered with a major bank to deliver full creative naming and a launch campaign for their product, a personalized automated travel and expense management tool.
We partnered with a fintech investing company to learn about how children and their parents introduce and discuss the topic of investment and finances.
We partnered with a fintech peer-to-peer payments provider to better understand Gen Z and their approach to finances, and how to cultivate a deeper relationship with them.
We partnered with an online-only bank to deliver a psychographic customer segmentation to help engage their customers and inform future marketing messaging and initiatives.
We partnered with a major bank to build personas based on embedded payments behavior (e.g., in-app commerce, including saving a credit or debit card to a digital wallet, app, online merchant, biller, or browser).
We partnered with a major bank to transform the online shopping experience via an in-depth audit of the competitive landscape, a UX trend analysis, blue-sky concepts, and key strategic recommendations for future development of the platform.
Interested to know more about any of these projects or our financial and technical expertise?
We’d be thrilled to walk you through our process and these recent projects. Schedule a capabilities presentation today. ►
Whether your team is looking for fintech segment, industry, or product expertise, our research, strategy, and creative teams are here to help.
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