So, what exactly are fintechs? Fintechs, a portmanteau of ‘financial technology’, are companies that are using cutting-edge technology to compete with traditional financial methods and services. Fintechs touch every part of financial services. They range from payments with well-known companies like Venmo and Zelle™ to lending superpower Rocket Mortgage, investing pioneers Acorns and Robinhood, and others venturing into crypto and beyond.

Figure 1: Number of Fintech Apps Used by Generation

Source: Raddon Research Insights

In fact, according to our most recent study on fintechs, as age decreases the number of fintech applications a consumer has increases. Gen Zers statistically have the highest number of fintech apps on their mobile devices for several services.

Why Are Consumers Using Fintechs?

When it comes to mobile and online users for banking and fintechs, consumers want to go with ease and convenience.
 

Figure 2: Reasons Consumers Use Each Type of Fintech

Source: Raddon Research Insights, 2022
 

More than 50% of all fintech users, except for those using family and teen banking apps, answered that they use these applications for convenience and ease of use. This is important to know when determining whether to partner or compete with a fintech in your mobile banking app and the services it provides.

Convenience and ease of use can look different to each consumer. Convenience could mean that the app is easily accessible, that there is a 24/7 support line, or that you can get the service you need quickly. Ease of use may look like a simple application that gets the job done or touch/face ID to open the app while keeping your information private, which is important no matter a consumer’s age. Regardless, with life being busy and fast-paced, people expect financial services to be completed quickly and simply on their mobile device without their having to go into a physical branch during work hours.

App Usage Between Fintechs

In our study, we analyzed eight different styles of fintech apps: finance, budgeting, investing, borrowing, buy now pay later, payments, cryptocurrency, and family/teen banking. Each type of app holds a different purpose, and we found that they also differ in popularity.

Figure 3: Usage Among Each Type of Fintech We Surveyed

Figure 4: Why Did Payment Users Abandon Their App?

Source: Raddon Research Insights, 2022

No surprise here: Payments blow the other types of fintech apps out of the water. This includes person-to-person quick and easy payments. Although payment apps are some of the most used in the market, respondents stated that if they no longer use an app for payments, it was because they only needed it for one specific purpose. Whether you need to pay the babysitter, have your teenager reimburse you for their phone bill or help your roommate with the groceries, payment apps are popular for quick and even just one-time usage for those individual needs.

Although Consumers Use Multiple Fintech Apps, They Would Prefer if Their PFI Offered These Services

Figure 5:  Prefer Financial Institution App if Offered Same Functionality

Source: Raddon Research Insights, 2022

Family and teen banking services are a great opportunity for competing. This style of fintech is designed for parents and their teens to interact with each other, and for parents to help educate their children about finances. Many include features such as a secured debit card and allocating allowances.

With the current low volume of users, 37% of respondents that abandoned a family/teen banking app stated it was due to it not working as advertized. On top of that, 86% stated that they wished their PFI offered this service. It probably goes without saying, but this service would be a great opportunity to add to your mobile banking. Not only is this kind of service a great option for parents to help their children with finances, but it also opens the door to twice as many consumers because it reaches both parents and their children. The service may also help your institution build a relationship with the younger generations.

So How do Financial Institutions Compare? Should You Compete or Partner?

Although adding each type of fintech service may seem appealing in order to gain more traction with your mobile app or online banking, doing so all at once may not be the best option. When looking at payments, for instance, the amount of saturation makes it difficult for an individual financial institution to grab market share, yet adding this service may attract consumers. To make the decision of who to partner or compete with, you have to see how much your organization can handle in terms of adapting and updating your online services to stay on top of the market.

Figure 6: Primary and Secondary Users of Payments Apps, Among Payments Fintech Users

Source: Raddon Research Insights, 2022

PayPal takes the lead in consumers’ primary fintech app for payments. This differs from past research, which indicated that Venmo was the most used application. This goes to show how something that may be popular today may not be tomorrow.

Conclusion

When figuring out the path to partner or compete with a fintech company, remember to pay attention to the market and partner with one, or become a savvy financial institution that is constantly adapting.

Features and services are always changing and adapting. When trying to decide what services to add to your online banking, whether your organization wants to compete or partner with a fintech to up your online and mobile game, remember that there are features and services that consumers wish their PFI offered. Family/teen banking is a great example. If you’ve got your finger on the pulse of changing trends and are ready and willing to adapt, you may see great success and usage of your mobile and online apps.