NerdWallet: FinTech Trends to Watch for in 2015
March 23, 2015
March 23, 2015
By: Emily Starbuck Crone, NerdWallet
In a digital world with very public security concerns, consumers expect a safe and increasingly mobile relationship with their financial services providers. When consumers do their banking, there are conveniences they’ve come to appreciate, if not expect.
EMV Chip Technology
In the wake of the Target, Home Depot and other major data breaches, cards embossed with a computer circuit known as an EMV chip are poised to help fight card fraud. EMV chips hold key information in scrambled form.
But while increasing numbers of financial institutions are rolling out these cards and retailers are adopting pay terminals that use the technology, public awareness of it remains low. In a study released last year, payments company Verifone said that just 54% of American consumers are familiar with EMV chipped cards.
Many of those who know about EMV, which stands for technology developers EuroPay, MasterCard and Visa, have cards with chips, Verifone said, including about half who are under 40.
Awareness and adoption are higher among younger consumers; national policy is moving issuers and retailers toward widespread acceptance of the devices by October.
Mobile payment systems gained more visibility and users with the launch of Apple Pay last year. Apple Pay, which lets people use their iPhone 6 or Apple Watch to pay for things, has already partnered with big banks and large credit unions across the country, plus dozens of major retailers. Millions of Apple Pay-enabled devices have been sold. As the technology becomes more readily adopted, tech-savvy consumers may be looking for financial service providers with compatible systems.
As Apple Pay, Google Wallet and PayPal are increasingly used for transactions, banking providers would do well to make sure they offer the mobile technologies consumers are coming to expect. These can include check deposit, bill payment and even person-to-person money transfers.
Financial institutions that don’t offer basic online and mobile banking are also missing a major opportunity. A Brookings Institution report from May 2014 found that half of millennials, or people under roughly age 30, regularly use smartphones for banking, and 88% of those polled bank online. The lack of those services is likely to put off younger consumers seeking these conveniences.
Not only does going digital make a financial services provider more relevant and accessible to consumers, it can also save money. Research from global consulting firm McKinsey & Company shows that moving some banking functions to digital can cut costs by up to half.
Other Trends to Watch
Some industry experts say banks and credit unions need to focus on optimizing customer experiences, with sleeker designs, technology-enhanced support and better integration of digital channels. Others focus on how technology can make basic processes easier, like FinTech company Currency Cloud, which simplifies international money transfers.
These are just a few of the top financial technology trends that promise to shape consumer experiences and demands. It’s clear that the market has gone beyond digital into mobile territory, and financial service providers need to go there, too.
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