Day: December 13, 2021

The finance industry has undergone a digital transformation. For decades, institutions have been our most trusted financial advisors, but the rapid rise of FinTech has allowed us to take matters into our own hands— literally. Through mobile smartphone apps, FinTech offers consumers new levels of access, power, and control, and as a result, they are now re-writing the traditional rules of finance to work in their favor. FinTech also creates new opportunities for financial inclusivity. By providing everyone equal access to products and services, FinTech aims to right the wrongs of the past and level the playing field for the future. But while these messages of empowerment, equality, and self-reliance resonate with today’s consumers, this new world of digital finance remains mostly unknown. To better understand how the finance industry is evolving, Vox Media partnered with Woo Brand Research on a survey of over 3,000 general consumers. 85% of those surveyed feel that technology has made it easier for them to access their financial information, and 82% believe technology has given people the confidence to take control of their finances. Still, overall usage on mobile finance apps remains low (with the finance-savvy Vox Media consumer being the exception to the rule). Now is the time for brands to build meaningful relationships with consumers and help guide them on their path toward financial freedom. Here’s our rundown on how consumers are shaping the new financial future. APPS ARE THE FUTURE Right now, 68% of consumers do most of their banking online. However, there is a growing desire to do more from their phones; in fact, over half (53%) say they would prefer to do all their banking on their smartphone if they could, and 52% say they would use their mobile phone to pay for everything. This desire, coupled with last year’s increase in finance-related mobile app installs, highlights the integral role apps will play in our financial futures. Because our phones are always close by, apps provide the accessibility and control to easily manage our finances anytime, anywhere. We already see 41% of consumers saying that if they could, they would use mobile apps to do everything finance-related. Some key trends among apps: Among the categories we tracked, we see just about all mobile app installs increasing from a year ago— a sign of their growing popularity. While the percentage of apps installed for bank and savings accounts from traditional institutions like Bank of America, Chase, Citi, etc, remained the same, they continue to be the most-installed type of app for finance management. While app installations continue to trend upwards, their actual usage remains low. Right now, more than 50% of consumers have mobile apps for banking, personal wealth management, and digital payment. Credit monitoring apps are also becoming more popular, with the expectation that they will continue to grow at a high rate given the increase of data security breaches. Falling in the middle are mobile apps used for investing, Buy Now, Pay Later (BNPL), loan acquisition, and buying insurance, at about 30-40%. Real estate and investments currently fall at the lower end, with just over one-fourth having these types of apps.  However, there is great potential based on the current real estate market. Among consumers who do not currently have a mobile app installed for any one of these categories, on average, about one-fourth say they are open to getting them in the next year. Millennials are most likely to have a financed-related app installed for each of these categories, followed by Gen Z. Gen X are currently using mobile apps mostly for banking, digital payments, and credit monitoring, but based on their age and earning power, investing in this group makes fiscal sense in the other categories as well. EDUCATION CAN HELP CONSUMERS BUILD CONFIDENCE  While installations of finance apps continue to rise, as of now, only half of consumers understand how to use them. In order to grow the market, companies (both old and new) must first commit to educating consumers on the benefits and advantages of their apps over traditional products and services. Only 47% of those surveyed say they are comfortable using apps to manage their financial portfolios.  For the rest, learning more about the inner workings of these apps, including their benefits and security parameters, can help alleviate current insecurities. Marketers should be cognizant of the fact that how they market to each of the generations may involve a certain level of customization, particularly for Gen Z and Gen X. We say this because: The “newbies’’ among Gen Z are, for the most part, at the beginning stages of building their financial portfolios.  As true digital natives, they don’t need guidance on how to use finance apps, but they do require education about what the apps do and how they can benefit from them. Gen X have had many years of practice managing their finances, but mostly through traditional products and services. In order to capture Gen X’s attention, marketers should focus on helping them transition from the past to the present, including education on the benefits of apps to their financial security and safety. LOYALTY IS FLEETING, AND NO BRAND OR COMPANY IS IMMUNE Consumers are making financial institutions work harder than ever before for their business and loyalty.  As new disruptive companies enter the market and offer consumers more choice, big brands that once dominated the industry are no longer safe.  Consumers demand  innovation and will not hesitate to switch brands if they find something better. 41% feel that more established financial institutions are not offering enough new technology products and services. 39% say they are not loyal to any one mobile app brand and they will switch if they find something better. 32% prefer to support new and upcoming mobile app brands vs. those that have been around longer. BANKING VS. INVESTING AND PERSONAL FINANCE MANAGEMENT Despite the learning curve, consumers are more familiar with banking apps than they are with investing and personal wealth management apps, which translates to