Each new year means new opportunities. And while the past two years have brought a lot of worry along with that opportunity, one can always look towards a brighter future. Just like last year’s 2021 trends predictions, Narmi has a few ideas about what might be in store for 2022. This year, though, we were joined by our fintech peers who also shared what they predict is ahead for financial institutions, fintech companies, and customers around the world.
Narmi co-founder Chris Griffin chatted with Pritee Tembhekar from Lithic’s product team and Unit’s head of platform Alex Cramer for a discussion moderated by Alloy’s Charley Ma, sharing their excitement for what the coming year might hold.
With broader speculations about the evolution of banking and finance in the US out of the way, Chris, Pritee, and Alex gave their predictions about the particular verticals they’re most excited to watch in 2022.
Digital payment options – which allow customers to pay directly from their phones – are increasingly popular, and may become a real competition to a physical card. After all, paying via phone is much faster: it connects to banks directly so any issues can be immediately noted, and it’s one less object to worry about.
“I think it’s one of the big things coming out of the pandemic, your phone as your wallet,” Pritee says. “And if we play this trend forward, in five or ten years, will we really still see the need for plastic?”
Though still largely dominated by huge corporations like Apple and Google, smaller fintechs have a new opportunity to edge into this market. “Who can add their service to the digital wallet is still highly regulated,” Pritee says, “so I’m very curious to see how this plays out.”
More and more, people are choosing to live as “digital nomads.” Without a long-term fixed address, they stay connected to work and family remotely as they move from place to place or travel frequently and for extended periods of time.
“People are living out of AirBnBs, and some are now their own bosses and trying to figure out how to pay and get paid, and make sure their relationships stay up-to-date,” Alex says. He also notes how digital wallets, as Pritee mentioned, will likely play a major role for those living the nomadic lifestyle. Digital banking allows them to stay on top of their finances, but they can still run into problems when it comes to international relocation.
Fintechs have the opportunity to help these nomads and financial institutions handle exchange rates, varying regulations, and more so customers can bank reliably as they live on their terms. “They might need to contract with a shipping company because USPS won’t deliver internationally,” Alex adds.
While phones might be the new way to pay and reduce the need for physical cards, per Pritee’s prediction, reality is still physical and people will always need a discrete object from time to time, like a debit card or a cashier’s check, maintains Chris.
“So much of what we talk about is digital-only,” he says, “but we still do very much live in a physical world. For example, your landlord might require a cashier’s check for the first month’s rent, which means you need one now.”
One way for fintech to break into the physical world might be via a delivery service, something that can get customers the item they need without a waiting period or a trip to a physical branch. “I think we’ll see fintech take a hybrid approach to the digital and physical,” Chris says.
Taking cues from grocery delivery services accessed through an app, fintechs might be able to add an extra layer of convenience with a service that gets someone a new debit card in just a few minutes. “There are a lot of different physical delivery models that haven’t been explored,” says Chris.
The younger market is full of untapped potential, but account minimums and other limitations often prevent young people from opening accounts. Changing these standards could increase customer bases dramatically. “Younger audiences are looking for a card product or banking relationship that just works for them, on their own terms, and when they want it,” Alex explains. “In some cases, the when is more important than the how.”
It’s already known that younger groups want peer-to-peer money exchange and rapid gratification, but trends, technology, and values are ever-changing, and so fintechs must rise to meet those changes.
To pull in younger demographics, though, fintechs must pay close attention to what younger generations want and have agile marketing teams that can keep up with emerging trends and create branding that resonates with those customers. “They want services that work for them and speak to them,” says Pritee, “and a lot of that comes down to branding. There’s still a need for astute marketers who speak the language.”
Watch the full conversation here for even more insights, ideas, and predictions about what the future might hold for fintechs and finance.