New research suggests contactless banking and payments are on the rise. But what does it mean for consumers, FinTech and the “next normal”?
Global pandemic aside, consumers’ financial behaviors have evolved considerably in recent years. Mobile payment apps, direct deposit and cryptocurrency have become the status quo for many people, and for others it may be only a matter of time.
The unique circumstances of COVID-19 accelerated many of these digital trends, especially when companies sent employees to work at home and cash seemed far more germ-ridden and riskier to handle. This resulted in consumers seeking alternative ways to manage their finances, buy and even receive their purchases. The widespread shift in financial behaviors creates a stark contrast with where we were even a year or two ago and offers clarity on where we’re heading as the new reality settles into the fabric of American life. SYKES for FinTech’s new survey report explores that dynamic and predicts how consumers might manage their money long after the pandemic subsides. So, ditch your tattered wallets and read on for a few of the major highlights.
Mobile Banking & Payment
While “there’s an app for that” is now implied, many were hesitant to adopt mobile payment methods like Venmo and Cash App. However, consumers are now yearning for contactless buying and selling, and these types of apps were ready to make the exchange.
In fact, nearly a third of respondents had never used mobile payment apps before the pandemic, and moving forward, most (54%) will rely on a combination of payment methods, including credit cards, contactless apps and digital money.
Personal Finance & Investing
While millennials are traditionally less likely to invest than other demographics, the convenience of cryptocurrency may change these digital natives’ minds. To underscore this, 34% of pandemic-induced cryptocurrency users are ages 18–24, something FinTech companies and investment firms alike should be excited about.
Clearly, the use of cryptocurrency is on the rise, but digital investing methods are not the only ones seeing a boom. A considerable 16% say they are now using personal finance apps like PocketGuard and Mint to manage their money, as even budgeting apps are finding their niche in the next normal.
Pandemic & Post-Pandemic Consumer Behaviors
Beyond the way Americans are accepting digital money and money management techniques in the era of COVID-19, our survey also explored consumer behaviors during the pandemic. We picked our respondents’ minds to better understand which new habits were likely to stick around that were not in the mix before.
Unsurprisingly, contactless payment for food and groceries are on the rise (37% of those who order groceries online only did so for the first time in response to the coronavirus), but the desire to avoid personal contact extends far beyond delivery. In fact, a robust 23% say they will rely more on same-day, curbside pickup for food and retail items, suggesting that consumers are just as — if not more so — concerned about personal safety as they are about convenience.
App developers and FinTech companies had already made massive strides to promote contactless consumer behaviors, and COVID-19 bolstered them to the forefront of societal norms. Consumers were willing and able to utilize digital banking tools as soon as it became necessary, and they will continue to rely on them moving forward.
Of course, the “next normal” is still working itself out, and the ubiquity of consumer behaviors may not be fully realized for years. For example, the ease of online purchasing is superior, but some brands may elicit other aspects of offline shopping experiences that may strike the right balance for consumers to visit a store. Still, the FinTech industry now has a clear path to evolve digital banking and omnichannel retail experiences. Their strategies need to resonate today and have long-term traction.
Want to see more survey highlights and predictions of what’s to come? Make sure to download the full report here.