October 12, 2021
[Report] The Fintech Effect: Fintech's Mass Adoption Moment
Consumer impact is at the heart of fintech’s mission, and its success. Last year, in conjunction with The Harris Poll, Plaid launched our annual consumer survey, The Fintech Effect, to better understand how people use financial technology and its impact on their financial lives. In two years, we’ve seen fintech move from the corner of the financial system to its center.
We are excited to publish this year’s report, The Fintech Effect 2021: Fintech’s Mass Adoption Moment. Here are just a few of the interesting findings from the report:
Fintech is more widely used than social media
In 2021, fintech reached mass adoption. The percentage of U.S. consumers using technology to manage their finances jumped 52% year-over-year, from 58% to 88% (86% in the UK). In comparison, more people now use fintech than video streaming services (78%) and social media (72%), placing fintech among the most widely adopted consumer technologies outside of the internet (93%).
Strong benefits keep consumers coming back
Our survey also explored the implications of fintech’s mass adoption. People gravitate to fintech for speed, ease and convenience, but it is the strong benefits and positive outcomes that are cementing fintech as the primary way of managing money moving forward. People report that Fintech saves them time (93%) and money (78%), and helps them make smarter financial decisions (73%), and reduce financial stress (71%).
Mass adoption is here, but there is plenty of room for growth
The survey shows strong usage across a broad range of apps and services, but also indicates plenty of room for continued growth, as no single use case surpassed 70% penetration. Payment apps lead in terms of overall use, while savings and investing app use grew the most year over year, increasing 24% and 18% to reach totals of 57% and 51% respectively, which corresponds to consumers saying that short and long-term savings and investing are top financial challenges.
Usage evening out across age, race and gender demographics
Use is also reaching parity across genders, ethnicities and generations. In fact, while millennials lead with 95% overall adoption, Baby Boomers are the fastest growing segment – use doubled year-over-year from 39%-79%. Among some ethnicities, fintech use approached and even surpassed traditional banking use in 2021. For example, 95% of US Hispanic respondents report using Fintech, while reportedly 88% of US Hispanics are banked.
Consumers expect interoperable financial services
As consumers increasingly use multiple apps and services to manage their financial lives, they expect interoperability between those services. In fact, 80% of respondents said it is important to be able to connect their bank account to the digital financial apps and services they choose, and 76% indicated this connectivity was an expectation when choosing a bank.
Fintech users are more comfortable talking about money
Some of the most surprising stats in the report about how the culture of money is changing. 71% of those we surveyed say the more they use Fintech, the more confident they feel about their finances. 71% also say Fintech has made finances more social, something they feel more comfortable talking about. In fact, for more than half of Americans (54%), finance has become a dinner table topic, even more so among Hispanic people (74%) and Black people (61%).
Trust in fintech scales with use
Consumer trust is a critical component of any financial service. Fintech wins consumers’ trust by providing secure, responsive, and reliable digital services, and the survey indicates that trust increases with use – 78% of respondents said they generally feel safe using fintech to manage their finances, and three in four (76%) say the more they use digital finance tools to manage their money, the more they trust them.
This mass adoption moment signals bigger changes ahead
The mass adoption of fintech represents a significant shift in consumer behavior - changing how, when and where people interact with their financial information and their money. It also represents a permanent change in consumer expectations as people want to do everything digitally. This shift is fueling innovation across every segment of finance to meet these new expectations.
Fintech companies and banks remain at the forefront, but there are shifts happening in every segment of the market and opportunities are everywhere for existing and new entrants. This mass adoption moment signals that fintech is no longer separate from the traditional financial system … it is simply becoming the way we do finance, digitally.
Plaid will continue to innovate to help fintech transform the future of finance. We look forward to building with you!