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The way we manage our finances has changed dramatically over the last decade. In the past month, 73 percent of smartphone users have used an app to manage their finances. Moreover, 60 percent of mobile users prefer to access and manage their finances with an app instead of mobile web. As developers have continually found new ways to innovate mobile finance, this vertical has gone from strength to strength, changing the landscape of personal banking and how businesses interact with their customers. This article explores how mobile finance is developing around the world and the popular trends commonly seen in fintech apps this year.
The future of fintech
Adjust’s Mobile Finance Report 2020, recently released in partnership with Apptopia, offers insight into the current state of fintech with a focus on the growth of install, retention rates and session rates. Speaking of the latest report, Paul H. Müller, Co-founder and CTO of Adjust, says “the impact the pandemic has had on banking and the increase in mobile digital services should not be underestimated. While the banking sector has been adapting to digital disruption for several years, COVID-19 is accelerating the transformation, opening up access and opportunity to millions of un- and under-banked consumers around the world.” Here are three of the key findings from this year’s report.
- Emerging markets are driving global growth: Thanks to the low market saturation of existing solutions and a pool of unbanked users, emerging markets – such as Turkey, Ukraine and Brazil – are seeing huge growth. These apps are often filling a need that was not previously supplied by traditional banking methods.
- Investment app activity is booming: According to Adjust data, investment apps are the second-fastest-growing vertical worldwide, while Apptopia’s data also shows enormous growth. From January to June 2020, the report shows an 88 percent growth in average sessions per day for investment apps. Incremental investment apps such as Acorns are democratizing day trading by offering features designed for beginners. The app can be synced to a user’s account and spare funds can be invested automatically.
- Payment apps have seen an average of 49 percent rise in sessions. The increase is even larger in Japan, which showed an increase of 75 percent. The report also showed a considerable increase in Germany (45%), Turkey (39%), the US (33%), and Great Britain (29%). This is likely a result of social distancing rules implemented as a result of the coronavirus pandemic, as mobile finance apps benefit from offering a more hygienic and convenient way to manage finances.
Six essential fintech trends you need to know
- Machine learning capabilities
Big data is used by mobile finance app developers for operations such as user segmentation and personalization: according to market research company Forrester, 89 percent of digital businesses are investing in personalization. SmarterHQ also found that 51 percent of marketers put personalization as their top priority.
Machine learning is also important to tech developers because it can be used to create better user experience. For example, chatbots can be implemented to provide fast and effective customer services for users. A study by Gartner predicted chatbots would interact with 85 percent of banks and businesses’ customers in 2020. Machine learning enables chatbots to develop and become more useful, which in turn saves the developer’s team from manual tasks. This is a 24-hour service that can also save users time by eliminating waiting times before speaking with a customer services employee.
- Innovative payment methods
As mobile finance app developers continue to innovate new ways for their customers to complete a transaction, users are no longer limited to traditional payment methods that are not ideal for contemporary user habits. For example, QR codes and mobile wallets have become an effective way for users to easily complete a transaction while also saving them the trouble of needing a physical wallet.
- Flexible payment distribution
Some mobile finance apps are giving users more options in terms of when they have access to incoming payroll. Instead of payday loans that can take advantage of a user’s situation, this enables the user to gain access to funds in advance without relatively large interest rates. This feature gives users more freedom to distribute their money in cases of emergencies and unexpected costs that are due before payday.
- Digital-only and mobile-first banks
The success of mobile-first banks is proving that a physical branch may not always be necessary. This can present a win-win scenario whereby the user doesn’t need to find a local branch to sign paperwork while banks save the cost of maintaining a physical store.
- Automation
Automation has had a considerable impact on the development of mobile finance. The purpose of automation tools is to carry out any activities that can be completed without manual work. Fintech companies can use automation to speed up processes and reduce the workload of employees so that they have more time to utilize their expertise. Automation can also provide a better user experience. Examples of automated processes when developing a fintech app include application status updates, balance information and confirmation emails.
- Real-time reporting
Fintech app developers are always looking for innovative ways for their users to stay up-to-date with their finances and investments. Real-time reporting means that users have immediate access to financial data whenever they need it. This is extremely valuable to users who want to act proactively to financial management and investments as opposed to reactively. Real-time reporting is fast becoming the industry standard and an expectation for mobile users.