It’s not hard to understand why fintech products have grown in popularity in recent years. They offer a degree of convenience that banks and other traditional financial institutions can’t match. Obviously, such products are going to be attractive to customers.
However, convenience isn’t the only reason more and more people are embracing fintech. The following are just a few other factors that have contributed to this particular tech revolution. The popularity of fintech continues to grow for these often-overlooked reasons:
Enhanced Security Measures
Anyone taking advantage of a financial service wants to know their funds are secure. Although some may worry that fintech applications leave their money vulnerable to cyberattacks, many consumers realize that such applications often boast stronger security measures than those offered by many traditional financial institutions.
For example, some fintech products are starting to use biometrics, like fingerprints or eye scans, to ensure only authorized users have access to their accounts. By leveraging technology, fintech companies can offer customers peace of mind.
Simplified Financial Planning
Gone are the days when knowing how much money you have in your bank account might require a trip to the nearest branch, or at least a visit to the ATM. Online banking solutions allow users to check their balances whenever and wherever they please.
Mobile fintech products have also made budgeting simple. Now, users can simply open the appropriate app on their phones whenever they need to check the status of an account. As a result, making smart financial decisions is easier than it’s ever been.
Although building a strong product and offering quality services should be the main goals of any financial institution, the fact of the matter is, branding and marketing are important. Even in the digital age, customers often develop loyalty to brands whose products they use. This has enabled fintech companies to stand out and appeal to a new generation of customers.
Traditionally, the branded identity of banks are outdated, relying on an assumed sense of authority. Many fintech companies, on the other hand, craft branded identities that are friendly, tech-savvy, and designed with Millennials and other young customers in mind. While an appealing brand does not guarantee a quality product, it does help fintech startups draw attention away from other financial institutions.
Venmo is a popular app that allows users to quickly request or send funds to each other. However, its ease-of-use isn’t the only reason Venmo has attracted so many young customers. There are plenty of similar apps, like PayPal, that offer virtually the same services, with some minor differences.
Venmo is popular among Millennials because it incorporates a social media aspect. For instance, when a user sends a friend money for concert tickets, they can share it publicly with other friends who use Venmo, much like a Facebook or Twitter post. This social element appeals to many users, especially younger ones, and it’s a key feature that non-fintech companies rarely offer.
Rapid Growth and Innovation
Prior to the fintech revolution, there was a long period of time during which banks and traditional financial institutions failed to adjust how they served customers in any sort of noticeable or meaningful way. Although some degree of innovation was always occurring, it was generally a gradual process.
Fintech companies, on the other hand, are perpetually striving to improve upon their products. That’s because they have to. Fintech involves leveraging the latest, most useful technologies to offer high-quality financial services. However, existing technologies are constantly improving, and new ones are constantly emerging. Thus, fintech startups frequently release updated apps, implement new features, and generally make efforts to stand out among the competition by offering unparalleled service.
This is rarely the case with banks. These days, they’re more likely to play catch up.
Of course, that doesn’t mean that fintech companies should leave traditional financial institutions behind. Those institutions can help startups navigate the tricky regulatory waters of the financial services industry. Fintech companies, for their part, can help the banks incorporate the latest technology. By working together, both banks and fintech startups can thrive in this new financial environment.
That said, traditional financial institutions that don’t make adjustments or cooperate with fintech startups may continue to lose customers. Again, convenience is just one reason people switch over to fintech products. As the points here make evident, fintech applications offer a wide range of benefits. Customers aren’t going to stop using them because they’re loyal to their banks. They’ll do what they’ve always done; embrace whoever offers the best service. The sooner financial institutions accept this, the sooner they can partner up with new startups, taking advantage of the fintech revolution instead of being a casualty of it.