Sharp changes in consumer behaviors and preferences during the pandemic forced financial institutions to accelerate their digital transformation. And many of these customer expectations - like cashless transactions - are proving to have permanency as COVID fades from the rearview.
As a result, new FinTechs - from lending apps to alt investment platforms - have taken off and are competing for users. Meanwhile, traditional FIs are struggling to retain loyal customers.
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Below are the top two trends Alloy expects to heat up even more as we head into 2023:
P2P Goes B2B
PayPal launched P2P payments in the 1990s, identifying consumers’ need to digitally send money to each other - regardless of their banking institution. Fast forward to today, and 84% of U.S. consumers use P2P payment apps, including Zelle, Venmo, CashApp and Google Pay, with convenience, speed and security among the top root cause.
But consumers aren’t the only ones who need to send real-time payments; it’s also a B2B problem. According to a recent report, more than half of SMBs believe utilizing instant payment platforms would boost revenues. Further, Ginny Chappell, FIS’ SVP of Digital Payments, predicts that by 2025, 30% to 50% of B2B payments will not only be done digitally but also in real-time.
Mobile Wallets Unfold
In order to meet the demand for real-time payments, payment rails outside of North America are prioritizing their integration with digital wallets. Although Gen Z fully embraced digital wallets pre-pandemic, their popularity grew during the lockdown, and by 2021, 65% of millennials were using digital wallets. But it doesn’t end there.
McKinsey's research shows that over two-thirds of all Americans expect to have a mobile wallet within the next few years, with many thinking they will have three or more digital wallets. Driving this adoption is the promise of interoperability between, loyalty and reward points, financial services and even regional institutions.
As a top tech marketing agency, Alloy’s FinTech strategists are fluent in the future of finance - from digital banking to InsurTech, payroll, RegTech and more. See why we’ve earned a spot on the Best FinTech PR Agencies to Work With list.