It’s amazing to think how far we’ve come in terms of financial technology in a few short years. Only in 2018 did debit cards overtake cash as the most popular form of payment. Since then, the number of digital transactions, payment methods, and online sales have exploded.
According to a 2019 survey, while credit and debit card payments were used by 82% of people in the Americas, other digital payment methods are showing popularity. Sixty-six per cent use the likes of PayPal and Alipay. Meanwhile, 11% use e-wallets such as Apple Pay and Google Wallet. As our transactions venture further into the world of digitization, fintech innovation growth is accelerating among businesses.
Did you know that 96% of global consumers are aware of at least one fintech platform? It’s clear that customer attitudes toward financial technology are changing – and fintech is quickly catching up to more traditional payment methods. So, let’s take a look at how our behavior is shifting, how fast fintech is growing, and what we think about it.
A first time for everything
The global pandemic has changed many things in our lives, and according to a survey of American adults, we can see how perceptions of fintech have changed in the past year. The survey revealed that 37% of people ordered groceries online or through an app for the first time during the pandemic. Equally, 37% of people said they were likely to continue ordering their groceries online. The pandemic has not only changed what we buy, but also how we buy products online.
It’s important to understand that, while financial technology has been useful during the pandemic, it’s not going anywhere anytime soon. Fintech is here to stay. 73% of Americans say that fintech is the “new normal” for payments and managing money. The reasons for this are clear: 57% of people said fintech helps them save time, 42% said it saved them money, and 37% believe that fintech reduces the stress around money management.
But how has this increasing confidence in fintech evolved? And what will guarantee financial security and the technology’s viability in the future?
Safe and secure
After reasonable fees, security was named as the top feature that Americans expect from their financial institutions. But is there concern that fintech will not be able to ensure the same levels of privacy and security that traditional banking and payments currently hold? Innovation shouldn’t come at the expense of security, after all.
While fintech continues to innovate, online and digital fraud are becoming more sophisticated. For ecommerce businesses, this is represented in increased chargebacks and return fraud, which take advantage of digital and automated services. For consumers, identity theft and stolen personal information mean that fintech can appear as a risky alternative to traditional banking and shopping. In fact, in a survey of financial decision-makers, 27% of respondents said that safety and security was the top threat to fintech innovation. This was also the top concern, beating other threats to fintech such as regulation and technology itself. So, how is this being tackled?
One fintech business, Signifyd, believes that driving innovation in commerce protection is as important as increasing the capabilities of financial technology.
“Increasingly the future of commerce is online. As we continue to innovate to protect our merchant customers from payment fraud and consumer abuse we remain focused on protecting the commerce experience both for the merchants in Signifyd’s Commerce Network and for their customers,” said Stefan Nandzik, Signifyd senior vice president of brand experience. “This is best achieved through data and the technology that makes it actionable. Today, 98% per cent of all online purchases are made by consumers that have been seen before on Signifyd’s network. That allows us to provide unmatched identity-centric fraud protection.”
Growing trust for trusted users
It’s clear that fintech services are becoming increasingly popular and more trusted. Since the start of the pandemic, every section of financial technology has increased its user share. Banking excels in the scene, with 23% of Americans using technology to access their money. This is followed by payment services, investment, and lending. Interestingly, payment technology services have the largest percentage of fintech users with more than one account. This shows how technology is allowing consumers to vary their payment options.
While only 16% of Americans use fintech for payments, 19% have more than one account with payment providers. This suggests that among fintech users, trust is growing. Those who find utility in the technology are more likely to continue expanding their use of platforms, applications, and online services to manage their money and payments.
Are you a fintech enthusiast? Or have you been using fintech all this time without realizing it? As financial technology continues to innovate and its use increases, it’s important that we shift the attitudes of customers to a positive view of this essential service. Fintech is only getting safer, more secure, more convenient, and useful for our everyday transactions and banking needs.