Financial companies seem to be ahead of the curve when it comes to developing mobile-first products.
Fintech – or financial technology – was a buzzword in 2015 with startups such as Tapview and Square raising large sums of money to ride the wave of digital disruption that is reshaping the sector.
Speaking at the recent Mobile Marketing Meet Up held in Sydney, GroupM’s Venessa Hunt said once the media and advertising industry consider mobile as a behaviour and not as a device, they will begin to understand how to best target consumers – something fintech businesses have been doing since conception.
“Startups have the most freedom to change and be agile as they don't have the same legacy ties as traditional banks. They can come up with innovative ideas and implement them quickly, whereas with big banks it can be like moving the titanic,” Hunt tells AdNews.
“For financial start ups, it is about finding the balance between creating trust with the brand, which Facebook and Snapchat have done, and the agility they can bring to the market.”
Here are five fintech trends on mobile you should be aware of.
1. Micropayments
Mobile commerce will benefit from the gamification of industries, with customers becoming more familiar with making multiple, small purchases on devices. Fairfax recently began a trial with micropayments for content, partnering with Tapview, which sees readers pay less than $1 to access content.
Micropayments have been adopted by the music industry globally and big publishers are following suit. These payment models have been adopted by some of the largest newspapers in the US, including The New York Times and The Washington Post.
“There has been a huge shift in digital payments – mammoth changes. Digital payments used to be owned by the banks, now there is a huge amount of stuff coming out of the sharing economy and also peer-to-peer transactions,” Hunt says.
Mobile payments have tended to favour micropayments, but Hunt predicts consumers will increasingly use mobile for larger purchases as they build trust with the medium.
“Now people are beginning to purchase products worth thousands of dollars,” she tells AdNews.
2. Using smartphones instead of bank cards
A new generation of apps are making transferring money faster, less expensive and reducing the hassle of going to the ATM. The opportunity is huge, reported to be worth more than US$1 trillion, according to Business Insider.
Apple Pay, Android Pay and Samsung Pay have invested in the category, allowing Australians to store credit card information on their mobile and pay for purchases without whipping out their wallet.
Hunt says Australia has made strides in adopting mobile payments, with ANZ and NAB adopting the technology this year. She predicts other banks will follow suit.
“ANZ and NAB have been incredibly progressive in the market. Now we need the other big banks,” she says.
“The utility behind the phone is changing incredibly fast and it taps into the idea of not needing a wallet any more.”
Earlier this year ANZ backed Apple Pay with a marketing campaign. Hunt says the marketing of these products will play a huge role as consumers still need more education to feel comfortable using the techology.
“Apple has done a great job in the marketing behind Apple Pay and for other brands there is a long way to go from the consumer education standpoint. Australians were quick adopters of Pay Pass and Pay Wave so in my mind I don't think the uptake will be slow once big banks provide the functionality.”
Hunt says advances in mobile technology will soon allow brands to continue a conversation with consumers beyond the point of sale, such as when a consumer passes an interactive billboard.
“The biggest change for mobile will be the ability to take the transaction beyond the point-of-sale system and interact with anything in the world,” Hunt says.
3. Artificial intelligence
Hunt believes your next stock broker could be a computer, with financial firms turning to machines to do the jobs humans have done for decades. This is already happening in the US, where machines are replacing people on Wall Street with trading exchanges closing down pits.
“AI will mean massive changes coming for the financial world, including financial advice. The technology will be used to create a uniform experience for all customers and getting rid of any dodgy happenings in the industry.”
Financial services companies such as American Express and Bank of America now have 'innovation centres' where they try to foster the startup mentality while staying true to established brands and infrastructure. With this trend kicking off overseas, it is sure to hit Down Under in 2017.
4. Peer-to-peer payments
At the beginning of this year Visa found Australia was slower to adopt peer-to-peer (P2P) payments than other countries. However, with new products from Facebook, Snapchat and Apple the digital transfer of money is becoming more normal to mobile users.
In March this year, Facebook added a P2P payments feature to its Messenger platform that boasts more than 1 billion users. Yesterday, it launched a marketplace that allows users to sell to other users on the platform.
Global payments firm Square, founded by Twitter CEO Jack Dorsey, was recently made available in Australia. The company paired with Snapchat in 2014 to form Snapcash, however, the payment feature has not been widely promoted.
Venmo has taken millennials by storm using emojis to make payments to friends and tapping into users who don’t carry cash. It was recently acquired by PayPal.
Hunt says: “Growth segments, or millennials, need to feel understood on mobile because they are the buyers of tomorrow.”
5. Blockchain technology
The technology underpinning the uncontrolled bitcoin digital currency is being used to improve transparency and security in banks. Blockchain is a distributed ledger technology that allows companies to digitally track the ownership of assets, providing security and transparency to the global movement of money.
Just last week, IBM announced banks and other financial institutions are adopting blockchain technology “dramatically faster” than expected, with 15% of top global banks intending to roll out full-scale commercial blockchain products in 2017. Most recently NAB sent its first transfer using blockchain.
In September, Australia was selected to spearhead a technical committee developing standards for blockchain, helping oversee the development of new international standards for the technology.
Hunt says the decentralisation of technology will see blockchain boom worldwide and revolutionise banking.
“From a sharing economy perspective, Uber and Airbnb have taught people they can trust strangers. We no longer have a fear of security online,” she says.
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