Is your inbox flooded with emails predicting trends for 2021? While trend forecasting might seem overdone or cliche, like joining a gym January 1, there’s good reason to reflect on themes emerging in your industry.
If you don’t stay relevant by responding to current trends, consumers will overlook your company in search of something shiny and new. Particularly in the fintech space, nimble startups are constantly filling market gaps with elegant, user-centric products.
The global outbreak of COVID-19 has hastened certain trends, requiring even more agility than past years. A substantial increase in remote work, a heightened awareness of germs, and an appetite for ease are some of the factors influencing these five trends we’re following for fintech companies this year.
Touchless Technologies Are Shaping Transactions
As a result of COVID-19, you’re probably wary of how many things you touch. It makes sense that people don’t want to use physical credit card machines or press ATM buttons.
But the demand for touchless technology started well before the current pandemic because its convenience makes it too good for consumers to pass up. Expect even more adoption of touchless transaction options going forward.
Touchless Payment Methods
If you could pay for everything by pulling up an app on your phone (think Apple Pay), you might never carry plastic cards around again. Also, imagine having your entire catalogue of credit cards stored digitally. You could choose the best card for each situation instead of being limited by the physical cards in your wallet.
Not only is it convenient when you don’t have to carry around physical cards and cash, it’s also more secure. What’s more annoying than losing your wallet and wasting an afternoon cancelling credit cards? Not to mention fear of fraudulent charges or even identity theft. Touchless payment all but eliminates this headache. It won’t be long until we’re all walletless.
Touchless ATMs aren’t as prevalent as touchless payment methods, but widespread use is likely on the horizon.
What’s more, ATMs will probably be touchless and screenless in the not-so-distant future. They’ll have a scanner, a cash slot, and some features to assist people who are visually impaired. The scanner will talk to the app on your phone, and your phone will then display the ATM interface. That’s it.
These streamlined ATMs are just as convenient as touchless payment and push us even closer to digital-only transactions.
Touchless Person-to-Person Transactions
There are already fintech companies excelling at touchless person-to-person transactions. Consider Wise (formerly TransferWise), an international online money transferring service. They saw a consumer need, transferring money internationally without steep exchange rates and middlemen, and aligned it with a successful business model.
Touchless person-to-person financial interactions also include technologies we’re already accustomed to, like Venmo and other pay apps. The time will come when these apps are even easier to use, perhaps only requiring you to tap your phone to your coworker’s phone to send that $20 to cover your share of lunch.
Voice-activated person-to-person transactions are coming too. Siri might send your partner money for this month’s cell phone bill, for instance.
Payment Apps Aren’t a Fad
Touchless technologies are clearly full of potential, and they’re not going anywhere. It’s crucial that merchants accept these alternate forms of payment to keep pace with changing times.
Here are just some of the most widely-used apps we’re talking about here:
- Cash App
- Apple Pay
- Google Pay
- Samsung Pay
These apps will become even trendier as more people unbank, or disengage with traditional banking systems. Moreover, as soon as one large-scale business like Starbucks decides to accept Venmo and the like as legitimate payment methods, people will begin to demand that all businesses do too.
It would be wise to get ahead of the curve and plan for the day these apps become mainstream payment options. The shift could happen in 2021.
Unbundling Leads to More Challenger Banks
The unbundling of bank services has been happening for years. Challenger banks are seeing the value in doing just one thing with expert precision instead of modeling big banks that do everything without this high level of specialization.
But unbundling is now occurring in every corner of the fintech space. There are companies dedicated to personal banking, mortgages, international transfers, small business loans, investing—the list goes on.
Because these challenger banks and other smaller companies are so invested in their one niche, the customer service and user interfaces tend to be superior. They’re not trying to cater to large, diverse groups of people like legacy companies. Instead they have just one customer type to please or service to offer, making customization and personalization easier on all fronts.
Unbundling also lends itself to efficiency, further increasing its appeal. Consider Stripe, an online payment processing company. Before Stripe, businesses had to open merchant accounts with big name banks. It was a dizzying slew of paperwork and administrative hoops just to get set up to accept payments. With Stripe, vendors can be up and running in a matter of hours.
Don’t be surprised to see even more unbundling and challenger banks this year. And if you’re an entrepreneur, reflect on potential unbundling opportunities you could pursue.
Simple, Expert Features Impress Users
The nature of challenger banks and other boutique companies has changed consumer expectations around design too.
As mentioned, these companies are offering fewer services to fewer customer types. This means they are able to simplify their software to address their specific niche exclusively. There’s less clutter because, again, more targeted platforms aren’t trying to do all things for all people.
At the same time, the features they do offer are more sophisticated. That’s because challenger banks and the like can afford to invest in expertly-designed features since there aren’t as many to create in the first place.
As a result, many consumers have not only come to expect but prefer fewer, better features. To reflect this trend, design your product to do exactly what your users need (and ask for) and nothing more.
Remote Banking Needs More Innovation
Online check cashing and transfers are commonplace, and not all that innovative anymore. Consumers now expect even more banking capabilities from the comfort of their couches, especially since the pandemic has us all spending more time at home.
Tele-Tellers and Responsiveness
The internet has made us more impatient. You likely close out of a browser if it doesn’t immediately load. It follows that, when a customer has a banking question, they want it answered easily and right away. Users want uncomplicated self-service options, and tele-tellers when that’s insufficient.
Tele-tellers refer to any customer service function that operates digitally and lessens (or eliminates) the need for in-person banking. Users might interact with a chatbot, send an instant message, or even video chat with a representative. Your primary goal going forward should be to address customers where and how they want.
Say Goodbye to Your Corner Bank
Because challenger banks are all online, customers have gotten comfortable with companies that don’t have brick-and-mortar locations. People in general are more comfortable doing just about everything online because of improved features, speed, accessibility, etc. Today’s apps have made it easy to deposit checks, transfer money, and pay bills, all from the palm of your hand. Look no further than USAA for an example of a giant financial services company which succeeds without physical branches all over town.
This may not surprise you, but it’s important to state that physical, traditional bank branches will continue to close. There’s no longer loyalty based on geography. Not to mention that getting rid of physical locations frees up funds to invest in what users really want—those well-designed, customer-first features.
Looking Back, And Ahead
2020 proved that it’s not enough to embrace change, you must push the envelope to come out ahead of your competition. Keep an eye on these trends to up the ante in 2021.
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