When thousands of fintech professionals come together for this year Silver 20/20 Europe conference, there will likely be jargon-filled conversations about product ideation, value chains, monetization strategies, and distributed ledger technology. But to continue to create truly consumer-centric products, leaders will need to stay grounded in the realities of their customers’ daily lives – how they view and experience the rapidly changing financial services industry and, most importantly, how they are not think about it (most consumers still don’t know what “fintech” is, for example).
Here are some consumer things to keep in mind:
1. Consumers in major economies are less financially healthy this year
As inflation affects consumers around the world in the wake of a lingering pandemic, their sense of financial security and well-being has weakened. Morning Consult’s quarterly surveys of consumers in 14 countries show that financial well-being scores – a numerical reflection of how consumers feel about their current and future financial situation – have fallen in all but two countries (Brazil and United Kingdom) from July 2021 to February 2022.
Across all countries surveyed, a minority of consumers feel well prepared for a major expense, and only 14% to 39% of consumers feel they are secure in their financial future. And those sentiments are unlikely to improve in the coming months as savings dwindle and consumers continue to battle inflation.
What this means for leaders: As traditional and fintech service providers engage in exciting conversations about innovation, it’s important they don’t lose sight of the prospects for consumers’ short- and long-term financial health. With so many financial challenges, how can leaders provide financial services that will have an immediate impact?
2. When it comes to trust and data privacy, financial service providers are held to a higher standard than other industries
The basics still matter: trust and data privacy remain cornerstones of financial services relationships, and rightly or not, these attributes matter more to consumer relationships with this industry than with others.
In the world’s 10 largest economies, consumers said confidence was higher in financial services than in all other sectors except health care. However, data privacy is even more important than trust. In eight of the 10 countries surveyed, consumers identified financial services as the sector in which data privacy is most important to them, more so than healthcare and technology.
What this means for leaders: While ideas like decentralization, open banking and “lack of confidence” are becoming more popular with the general public, it is important to examine whether these principles have an impact on broader consumer trust in the financial services industry and how they influence consumers’ sense of security regarding their financial data. From there, vendors will need to reevaluate how they build trust and communicate data privacy practices to consumers to ensure priorities align.
3. Cryptocurrency has gone from fringe to mainstream
In a relatively short period of time, cryptocurrency captured the collective imagination and found its way into the digital wallets and wallets of consumers around the world. Countries in South America and the Asia-Pacific region have particularly high rates of cryptocurrency usage, while Nigeria currently has the highest rate at 55%, according to Morning Consult Brand Intelligencewhich surveys consumers in 44 countries daily about their habits and their interactions with brands.
Despite the volatility and novelty of cryptocurrency, the technology is here to stay. It is fully entrenched in economies around the world, and more and more governments are exploring what it means for their own monetary systems and their citizens.
What this means for leaders: For many consumers, cryptocurrency is the gateway to a host of innovative financial services. As the technology becomes more popular, consumers are more likely to come across related concepts such as Web3 and decentralized finance. Consumers will likely be eager to experiment with these concepts, so leaders need to stay ahead of – and even embrace – these trends in order to anticipate consumer needs and preferences.
4. In many countries, consumers are more likely to use fintech payments and investments than online banking
Consumers are inundated with fintech products, but some fintech innovations catch on faster than others.
Proportion of adults who report doing the following at least once a month:
Source: Morning Consult Brand Intelligence
In the majority of countries surveyed, consumers are more likely to report using peer-to-peer money transfer services at least once a month compared to online banking. High shares of consumers around the world have made fintech purchases through social media, proving that fintech innovations are increasingly embedded in many everyday consumer behaviors.
The importance of transferring money seamlessly and digitally cannot be understated, especially for consumers in areas where traditional in-person access is limited. But beyond payments, consumers still need to be able to store their money securely and digitally, and in many economies a small proportion of consumers report using online banking.
What this means for leaders: Payments are still the tip of the spear and the primary way many consumers first experience fintech, but basic online banking fintech cannot be overlooked as an opportunity to improve service delivery that will have a significant impact on the daily life and financial management of consumers.
5. Consumers still don’t know what “fintech” is
The sobering truth is that while consumers use many technologies to conduct their financial lives, most say they don’t use fintech, indicating a disconnect between industry insiders and consumers who use these services.
Share of adults who said they had used a digital wallet or worked with a fintech provider in February 2022
Survey conducted from February 28 to March 13, 2022 among representative samples of 2,200 American adults and 1,000 adults each in Argentina, Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Russia, Singapore, South Korea, Spain and United Kingdom, with an unweighted margin of error for each country of up to +/- 3 percentage points.
Fintech is an industry term, not a consumer one. When asked, a majority of consumers say they do not work with any fintech providers, even though a majority of adults say they regularly interact with fintech through digital wallets and other apps, for example.
What this means for leaders: Don’t get lost in jargon. The term “fintech” will become increasingly meaningless: when everything is considered a fintech, and as financial applications increasingly become part of consumers’ daily lives, leaders will need to describe their innovations using other terms directly related to customers’ own financial lexicons and needs. They should speak in terms of the work consumers have to do, in a language they themselves use when talking about products and innovations.