3 Ways Fintech is Changing our Financial Future

Though the category of financial services has long been depicted as staid and stodgy, the marriage of financial services with technology (aptly named Fintech) has caused companies to rethink how their products and services appeal to the modern consumer. Some of the changes in financial services can be chalked up to more approachable branding, but others are challenging industry norms. Here, we take a look at some of the top trends in Fintech and how they’re coming to life in the form of products and services.

The Way We Pay

In case you haven’t noticed, big technology companies have been wading into the waters of finance over the past few years. From Apple to Uber, branded payments are headed for the mainstream. Take the former, for example. Apple partnered with Goldman Sachs to create its own credit card. By positioning the card as a simple and transparent way to bank (with a user-friendly app), they were able to process over $1.8 billion in transactions in Q1 of 2019. Later in 2019, Uber announced its plans for Uber Money, which offers debit cards and better payment options for its drivers. Within Uber Money’s mobile banking account, drivers can easily track their earning and spending history, manage and move their money, and more.

Outside of credit cards and banking accounts, big tech brands are experimenting with biometric payments, too. Amazon’s engineers are working on a phone-free, card-free payment system called Orville that lets Whole Foods shoppers pay their bill with a wave of the hand. These transactions will take only 300 milliseconds compared to three or four seconds for a card, and the added benefit for retailers is that consumers tend to spend more when they aren’t dealing with something as tangible as money. Similarly, other brands and start-ups are working on biometric payments through the use of fingerprints and even vein patterns.

(Image courtesy of TechCrunch)

The Audience

With younger generations entering the workplace and needing to manage their personal finances, financial institutions are adapting their services to cater to them. One such company, Greenlight, is a US-based debit card and app that aims to educate kids on financial literacy. Parents can see their child’s spending within the app, add money to their card, and dictate which locations money can be spent at – all with the goal of teaching them the value of a dollar without ever having to touch one.

It’s not just kids, though. Brands are providing solutions for those who have just entered the working world, too. Insurance can be a tough subject to tackle, but the likes of HSBC and Urban Jungle have both developed subscription-based insurance offerings for consumers in the UK. While they vary in both cost and scope, each provides flexibility for a generation of consumers with tight budgets and ever-changing needs.

The Way We Talk About Money

Chances are that you might not have never heard of Klarna, the Swedish online payment company with a shop-now, pay-later model. With Snoop Dogg as brand ambassador, Klarna aims to make shopping “smoooth.” Their advertisements put Snoop in outlandish situations that show what kind of purchases you can make thanks to Klarna’s payment model. While the ads are, indeed, silly, they represent a shift away from the monotonous branding of some traditional financial institutions. As a result, it has gained popularity amongst Gen Zs and Millennials who desire convenience and flexibility, as well as a bit of personality, from their brands.

(Image courtesy of Klarna)

On the more serious side of things, money can be a stressful subject. In fact, a Gallup poll from April 2019 found that 25% of Americans worry all or most of the time that their income will not suffice for their expenses. In the UK, they’re taking steps to address that. In November of 2019, the Money and Mental Health Policy Institute issued a manifesto that encouraged politicians to address issues surrounding mental health and financial difficulty – going as far as to suggest making financial advice a part of mental health services offered by the British National Health Service. In the U.S., companies like Happy Money aim to help consumers eliminate high interest credit card debt through low-interest loans. With mental health at the forefront of conversation across countries, it’s no surprise that financial well-being is getting attention. As we go forward, expect to see more companies and services that aim to help consumers break free from the emotionally debilitating effects of financial struggle.

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Source: Wunderman Thompson Future 100 2020