Fintech industry trends for 2022 and beyond
The way we manage our finances has changed dramatically over the last decade. In 2021, a whopping 95% of Gen Z with smartphones used mobile banking. And they aren’t the only ones; 91% of millennials, 85% of Gen X, 60% of baby boomers, and over 50% of seniors in the U.S. all actively used mobile banking. Furthermore, since the pandemic, 44% of people use apps most often to manage their bank accounts, according to the American Banking Association. This trend toward mobile banking has played out around the globe and shows no sign of slowing down. As developers have continually found new ways to innovate mobile finance, this vertical has gone from strength to strength, changing the landscape of personal banking and how businesses interact with their customers. This article explores how mobile finance is developing around the world and the popular trends commonly seen in fintech apps this year.
Fintech’s emerging markets and industry leaders
Around the world, mobile banking apps are changing the way we think about and manage our finances. In-store mobile payment app use hit a milestone in 2021, reaching 101.2 million in the U.S. alone. By 2024, the global mobile payment market size is expected to reach 3 trillion. Banking apps are also providing these services in locations where users had no previous access to a bank. For example, socially-focused mobile payment platform Netzme has set out to revolutionize mobile finance in Indonesia. Netzme takes a social approach to mobile finance to help unbanked users in rural areas. Netzme Co-founder and CEO Vicky Saputra says he started the company after the realization that “financial inclusion and financial literacy is quite a big issue [in Indonesia], especially for people in small cities and rural areas. As far as we know, these people are the majority, and we expect to have a really good social impact.”
Changes to the banking industry have been driven by ambitious startups and leading traditional banks alike. British multinational banking company Standard Chartered, for example, has embraced this digital revolution with their own virtual bank, Mox Bank. In an issue of Adjust’s LTV magazine, Mox Bank CEO Deniz Güven explained that “you cannot differentiate in this kind of market with just a new mobile banking app. You have to give a reason for customers to change their banks, which isn’t easy.” Deniz believes “your bankable population can be 100 percent and if you’re not on mobile, you’re missing out on this market share.”
The future of fintech
Adjust’s Mobile Finance Report 2020, released in partnership with Apptopia, offers insight into the state of fintech with a focus on the growth of installs, retention rates and session rates. Speaking of the report, Paul H. Müller, Co-founder and CTO of Adjust, says "the impact the pandemic has had on banking and the increase in mobile digital services should not be underestimated. While the banking sector has been adapting to digital disruption for several years, COVID-19 is accelerating the transformation, opening up access and opportunity to millions of un- and under-banked consumers around the world." Here are three of the key findings from the report.
- Emerging markets are driving global growth: Thanks to the low market saturation of existing solutions and a pool of unbanked users, emerging markets — such as Turkey, Ukraine and Brazil — are seeing huge growth. These apps are often filling a need that was not previously supplied by traditional banking methods.
- Investment app activity is booming: According to Adjust data, investment apps are the second-fastest-growing vertical worldwide, while Apptopia’s data also shows enormous growth. From January to June 2020, the report shows an 88 percent growth in average sessions per day for investment apps. Incremental investment apps such as Acorns are democratizing day trading by offering features designed for beginners. The app can be synced to a user’s account and spare funds can be invested automatically.
- Payment apps have seen an average of 49 percent rise in sessions. The increase is even larger in Japan, which showed an increase of 75 percent. The report also showed a considerable increase in Germany (45%), Turkey (39%), the US (33%), and Great Britain (29%). This is likely a result of social distancing rules implemented as a result of the coronavirus pandemic, as mobile finance apps benefit from offering a more hygienic and convenient way to manage finances.
Six essential fintech trends you need to know
1. Machine learning capabilities
Big data and machine learning is used by mobile finance app developers for operations such as user segmentation and personalization. Research shows 66% of customers expect companies to understand their individual needs and expectations. Meanwhile, 70% of customers say this impacts their loyalty — making personalization key to user acquisition and retention.
Machine learning is also important to tech developers because it can be used to create a better user experience. For example, chatbots can be implemented to provide fast and effective customer services for users. Chatbots are projected to handle 75-90% of healthcare and banking queries by 2022.Machine learning enables chatbots to develop and become more useful, which in turn saves the developer’s team from manual tasks. This is a 24-hour service that can also save users time by eliminating waiting times before speaking with a customer services employee.
2. Innovative payment methods
As mobile finance app developers continue to innovate new ways for their customers to complete a transaction, users are no longer limited to traditional payment methods that are not ideal for contemporary user habits. For example, QR codes and mobile wallets have become an effective way for users to easily complete a transaction while also saving them the trouble of needing a physical wallet.
3. Flexible payment distribution
Some mobile finance apps are giving users more options in terms of when they have access to incoming payroll. Instead of payday loans that can take advantage of a user’s situation, this enables the user to gain access to funds in advance without relatively large interest rates. This feature gives users more freedom to distribute their money in cases of emergencies and unexpected costs that are due before payday.
4. Digital-only and mobile-first banks
The success of mobile-first banks is proving that a physical branch may not always be necessary. This can present a win-win scenario whereby the user doesn’t need to find a local branch to sign paperwork while banks save the cost of maintaining a physical store.
Automation has had a considerable impact on the development of mobile finance. The purpose of automation tools is to carry out any activities that can be completed without manual work. Fintech companies can use automation to speed up processes and reduce the workload of employees so that they have more time to utilize their expertise. Automation can also provide a better user experience. Examples of automated processes when developing a fintech app include application status updates, balance information and confirmation emails.
6. Real-time reporting
Fintech app developers are always looking for innovative ways for their users to stay up-to-date with their finances and investments. Real-time reporting means that users have immediate access to financial data whenever they need it. This is extremely valuable to users who want to act proactively to financial management and investments as opposed to reactively. Real-time reporting is fast becoming the industry standard and an expectation for mobile users.
Developing a banking app in 2020: Critical elements of e-banking
When developing a fintech app it is important to consider the features that will make your app stand out from the long list of mobile finance apps available. When discovering your USP, you also need to address the following:
Customer support features
In addition to chatbots and other automated services, there will be times when users need to speak with an employee. This is an important step for fintech apps, as the stakes are high compared to other verticals. Ensuring that you have someone available is a critical step that ensures your users can trust your brand in any situation. To limit the frequency of when this type of customer support is needed, create a comprehensive FAQ page and ensure that your chatbots can address the most common complications when using your app.
The importance of security for fintech apps cannot be overstated. This is a critical factor for customers: if users have any doubts that your app is secure, they will uninstall and opt to use another service. Features that contribute to a tightly secure banking app includes payment blocking, two-factor authentication and only allowing users to submit complex passwords.
Establishing trust in mobile finance
One of the challenges app developers and marketers face when launching a new fintech app is establishing trust with users. There are several ways user onboarding can be crafted to help with this.
- Whenever a user is asked to enter personal details, it should be immediately understandable why you need this information. This can be comforting for users to see, enabling them to know that they aren’t giving away personal details for reasons that do not benefit their experience. As a general rule, the more transparent fintech apps can be, the more likely they are going to instill confidence in the user that they are using a trustworthy app.
- Be transparent with your app’s pricing model and other costs your users may encounter while using your app. Providing clarity to users as to when they will be charged for a service is essential to establishing trust while an unexpected cost may cause users to uninstall your app.
- Coordinate user onboarding across all channels: It’s important for users to have a streamlined experience regardless of how they prefer to sign up for your services. Ensure that your channels are synced so that the same information is displayed for the user and they do not have to repeat steps unnecessarily.