Top 3 FinTech Trends Disrupting Financial Services
INTRODUCTION
Gone are the days where major financial decisions were made over the course of several days (or weeks or months), in person, and sealed with a handshake. Today, you can purchase homeowner’s insurance in the same amount of time it takes to order a pizza. As people grow more accustomed to living their lives online, more and more are putting their trust into innovative fintech apps to help them spend wisely, save where they can, and protect their financial assets.
Due to this increasing growth and innovation, certain trends are starting to emerge. We’ve categorized the top three fintech trends of 2021 and analyzed how customers feel about them as well as what actions banking and financial services institutions should be taking in response.
TREND # 1
Customer-Centric Digital Experiences that are Simple and Seamless
WHAT DO CUSTOMERS WANT?
Whether account holders are applying for a loan or getting a life insurance quote, the experience should be friction free and progress smoothly. The experience should be purpose-built for the customer, as opposed to a simple digital capability add-on.
WHY DOES IT MATTER?
Customers are being wowed by new and innovative digital experiences from fintechs globally every day. Unfortunately, the legacy digital experiences offered by many banking and financial services institutions often lack customer-centric design, leaving account holders wanting more.
According to a study by The Financial Brand1, consumers utilize fintech services because:
One way organizatons are delivering more steramlined, personalized digital experiences in through the used the voice-activated virtual assistants.
Two leaders in voice-activated virtual assistants:
TREND # 2
Advisor Technology with Money Guidance and More
WHAT DO CUSTOMERS WANT?
Customers are looking for sophisticated tracking of their spending habits by combining several financial accounts into one dashboard. Even more, they want holistic guidance to better inform financial decisions.
WHY DOES IT MATTER?
To keep pace with fintech, best-in-class banking apps need to provide insights into possible wasteful spending, guidance on customized repayment plans, and even personalized offers—taking into account how to deliver the right unique experience through the right channel at the right time. The stakes are high in this #AdvisorTech disruption category, with significant potential revenue increases on the line.
Boston Consulting Group (BCG) estimates that for every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions.2
“[Mint] has helped me get my spending back on track. I’ve been able to pay down a significant amount of debt and stay focused on my spending.” - Grace, a Mint customer 3
TREND # 3
Investment Solutions that Appeal to Everyone
WHAT DO CUSTOMERS WANT?
Today’s investors don’t need deep pockets to get in on the action and build up an investment portfolio. Thanks to low cost and commission free trading, customers with a variety of financial backgrounds can get a foot in the door more easily than ever.
WHY DOES IT MATTER?
This approach allows fintech firms to attract new customers with both an attractive savings rate and a brand that is accepting of everyone, with the goal of converting them into investors later. Developing investment tech solutions that appeal to everyone is critical in this low-to-zero-fee era, because you must differentiate beyond price to win and retain investors.
“The investor in my head was someone who
wore a suit and a tie. Robinhood changed that for me.”
– Angelina, a Robinhood customer 4
IMPORTANT PLAYERS IN THE FIELD:
[1] Retail Banking Year in 2020: A Reflection in 20 Charts, The Financial Brand
[2] What Does Personalization in Banking Really Mean?, BCG
[3] Mint customer testimonials, Mint
[4] Our Customers, Robinhood