Four fintech imperatives for established brands

Plaid recently released its second annual report on fintech usage, dubbed The Fintech Effect: Fintech’s Mass Adoption Moment. Plaid defines fintech as “…any digital service that a consumer engages with in order to manage their money, including online banking, payments, investing, savings, budgeting, borrowing, and goal-setting.” So, the study is really about customer adoption of digital tools and platforms, and less about which platform they use to do that. The report contains interesting data on how the pandemic spurred growth of fintech platforms (up 30% from 2020 to 2021) and points to opportunities and challenges for financial services companies in the US.

As the title says, fintech has reached mass adoption. The study shows a 52% year over year increase—with 88% of US consumers using fintech platforms. That puts fintech in the same realm as video streaming subscriptions (78%) and is getting close to overall internet usage (93%). And since the usage is widespread through all demographics, there will be an ongoing opportunity for banks and other financial institutions to take advantage of this growth.

Plaid points to three key findings:

• Fintech’s value drives a permanent shift to digital. While the pandemic created a lot of initial experimentation, between 80-90% of fintech users plan to keep using fintech platforms beyond the pandemic. The majority report that fintech saves them time (93%), money (78%), and reduces financial fear and stress (71%).
• Fintech makes finance more social. 71% of US consumers surveyed say that fintech makes finance part of the daily conversation. 57% said that they have used a new financial tool or app because friends or family suggested it.
• Fintech integrates finance into people’s everyday lives. 48% of Americans use fintech every day, and 77% report that fintech seamlessly integrates into their daily lives.

So, what does all of this mean for financial marketers, especially those in more well-established traditional banks?

1. Your digital experiences —not your bank branches or your call center —are how your customer engages with your brand. Those experiences are no longer mere adjuncts and certainly can’t be afterthoughts. The need for elegant, easy to use, and helpful digital experiences cannot be overstated.
2. Your customers will readily share their experience…whether you want them to or not. The good, the bad, and the very ugly are all going to be promoted by them. If you are helping them, their friends and families will soon know. If your digital footprint is awkward or even worse, unhelpful, their friends will soon be pointing them towards one that isn’t.
3. Every day use is a great opportunity for continuous improvement. Paying close attention to how your customers are using digital, where they experience friction, and where they go elsewhere to solve problems, are great insights to be sewn into your strategic plan.
4. Innovation can’t be a phase. There will always be startups with better ideas nipping at your heels. To survive and thrive, established institutions need to have digital innovation structurally embedded in their organization to facilitate ongoing and continuous improvement.

And one more tidbit to whet your appetite for improving your digital experiences: the pandemic caused 74% of people to be more focused on their finances. That trend will likely continue and that means they’re going to be spending a lot more time either loving — or not — your digital experiences. And your brand.