Last year was a fruitful one for fintech. With particularly explosive growth in Latin America, the financial technology sector became one of the fastest-growing in the world, collecting more than a hundred billion in funding globally. The reasons are simple: the further development of new technologies like artificial intelligence, the popularization of cryptocurrencies and the overall acceleration of digital transformation have all taken the industry to new heights.
Today, fintech apps and software have grown to become a big part of our day-to-day. They provide the infrastructure behind our payments, money transfers and ecommerce transactions—and more importantly, they’ve democratized access to financial services. Especially in countries where inequalities in income and wealth distribution are steeper, and access to financial services is hindered by a high rate of unregistered employment, fintech startups have arisen as a step toward financial inclusion.
That said, fintech’s impact is also shifting the way traditional banks and other financial institutions are approaching their own long-established businesses. In the last few months working with fintech brands, we’ve identified at least five trends that are delineating the future of the industry—bleeding into all sorts of companies within the finance sector. Let’s take a look.
1. Agility Is Paying Off
A portmanteau of the terms finance and technology, fintech technically speaks to any kind of business that relies on technology to provide enhanced financial services. However, it’s not uncommon to limit its usage to digital-born startups specifically, which are built on the values of automation, flexibility and low-cost transactions achieved by high-end technology.
These startups possess what traditional financial institutions historically lacked: the agility to adapt and evolve at full tilt. It stems from necessity. In this highly-competitive market, only those who present accelerated rollouts of services can take the lead. As our SVP, Growth Daniela Glicenstajn explains, “Those who are quick to make decisions increase their chances of succeeding. We’re talking about constantly testing, learning, implementing, seeing what’s working and speeding down that road.”
Fintech brands need people and partners that are willing to stay on top of the latest technological advancements and changes in consumer behavior. However, identifying people’s needs is only the beginning: their organization must be characterized by a level of flexibility that allows them to deliver with aggressive time-to-market.
2. Taking Empathy Into Account
Despite the many advantages that young fintech companies present in terms of speed, accessibility and convenience, earning people’s trust remains one of the biggest challenges. But while tradition and reputation are defining aspects for consumers, fintech brands have found an even more engaging factor: empathy.
For anyone who’s ever been in debt, struggled with bad credit or was denied access to bank products, the concepts of finance and empathy may seem mutually exclusive—and with good reason. But all too often, these experiences come from a lack of understanding of the clients’ motivations. Fintech brands are better prepared to identify each person’s specific needs and better serve them with solutions that improve their financial wellbeing by removing needless friction.
At the very least, fintech companies have the tools to address their clients directly and more closely. “These brands need to prove their added value and differentiate themselves from traditional financial enterprises,” explains Maria Jimena Rojas, Sr. Account Lead, Growth. “One of the ways in which they are doing this is by taking a more empathetic approach to customer service and their overall relationship with clients.
Instead of being cold and distant, fintech brands focus on developing a closer relationship with people.
3. Checking up on User Experience
On that note about forging closer ties with people, UX plays a prominent role in the equation. Yet when it comes to fintech, balancing bureaucratic obstacles and user experience can be quite challenging. Today, the top fintech brands are looking for areas of improvement by performing UX audits and ISO quality testing—a series of computerized examination processes that offer certification opportunities for organizations according to the standard for quality management systems.
Our Director of Growth Alan Cripps explains, “The user experience needs to be in constant evolution. It’s not a one-time project, it’s something that needs to be worked on every day. Successful fintech brands are always thinking about how to make services more personalized, modern and how to offer relevant content at every stage of the consumer journey.”
4. Banking on Data-Driven Creativity
Especially now that third-party cookies are being phased out, no brand is blind to the importance of owning its data. Born in digital and raised in data protection compliance, fintech brands are usually well versed in first-party data, but should also be quick to bridge the gap between data and creativity. After all, their success depends on their ability to act upon the information.
“The biggest fintech brands right now don’t see data and creativity as two different things. They are bringing them together in integrated workstreams that empower creatives to deliver campaigns that yield better results,” stresses Growth Manager Francisco Fortes.
We can only reach the right people at the right time and with the right message if we’re developing creative campaigns that are data-driven.
5. The Line Between Fintechs and Traditional Banks Gets Blurry
If fintech comes down to combining finance and technology, then we’re looking at something that even the most long-established banks can do. The truth is, the increasing demand for digital transformation is already changing the way these companies approach their client-facing operations. And with these new fintech startups as a source of inspiration, banks can offer the best of both worlds: the benefits of a reputable company built on tradition and the agility of a digital-first brand.
“If we think about companies like BBVA or Banco Azteca, they are already giving their clients the option to operate online,” points out Gastón Fossati, our VP of Data Growth SPLA. “Most of them are looking to bring as many people as possible to the digital space instead of the physical branch."
The fact that these companies are baking machine learning and analytics into their strategy is proof that they understand the need for the digitalization of their products and how it helps improve their marketing ROI.
Whether we choose to think of fintech as exclusively digital-born startups or any kind of financial services company that uses technology to enhance its offering, the truth is this industry has witnessed skyrocketing growth in the past couple of years. With numerous innovations in the making and the promise of crypto as the currency of the metaverse, fintech brands are poised to keep growing—as long as they are quick to respond to consumers’ ever-changing needs before their competition.
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