Fintech is always changing, and there are some very interesting trends that are emerging this year. Where in the past, financial services have been targeted primarily towards wealthy clients, companies have begun to recognize that there are vastly underserved segments of the population — underserved segments that represent a tremendous potential for the growth and profitability of the financial service sector. As such, the following are fintech trends I believe are well worth noting.
- Social Networks are Being Used to Reach Out and Expand the Customer Base. Underserved demographics dominate social networks such as Facebook, Google+ and others. These individuals are typically young, low income and members of minority groups. This makes social networks the ideal places for targeted marketing aimed at helping these people improve their financial portfolios.
- Cash In/Cash Out broadly available and frictionless. Despite some claims, reports of the “death of cash” have been greatly exaggerated. While the use of cash is declining, nearly 1/4 of transactions are still conducted with bills and coins. Businesses realize this and are doing their best to facilitate a near-frictionless conversion to and from cash. This is imperative towards serving traditionally underserved consumers — 47 percent of whom prefer to use cash for their transactions.
- Big Data is Being Leveraged. The sheer volume of digital information available is making it easier for businesses to track, store and analyze their customer’s habits. While this is raising privacy concerns, it is also making it easier than ever for fintech providers to customize their services to match the needs of their clients. This is unlocking access to credit and helping many underserved demographics obtain loans and improve their portfolios.
- B2B2C is Making it Possible to Scale Up Service. Partnership is the name of the game, and these partnerships are making it easier than ever to reach out and expand services to underserved customers. Businesses have recognized that by joining together and offering complimentary service, they’re able to achieve tremendous growth. This is a benefit both for established and well-known brands who have the reputation to offer, as well as for smaller start-ups who have the clients.
I very am excited about these trends and will be watching them very closely. In fact, I would strongly suggest every fintech entrepreneur think about how they will impact their business.
Photo Source: cooldesign via FreeDigitalPhotos.net