Complex Made Simple

Checks and cash on the way out: Fintech in

traditional banking is seeing its last days (perhaps years). Here are the newest trends

China is the global leader in mobile wallets, Kenya is the birthplace of mobile money, and India is experiencing a rapid government-prompted pivot from cash Slower forms of ACH (Automated Clearing House) to drop off as faster payments take their place 2018 was a massive year for data breaches, and that could be part of what’s behind the high demand for safety-related capabilities

Words By: Business Insider (abridged version) 

Digital-only banks are redefining retail banking, open banking is pushing fintechs and legacy players to tap into customer data for more personalized services, and online transactions are swelling from widespread digitization. And these trends will continue at breakneck pace as more financial institutions up their digital capabilities and digital-only upstarts gain a greater foothold in the marketplace.

Business Insider Intelligence Head of Content Shelagh Dolan (SD) recently spoke with Daniel Van Dyke (DVD), Director of Research, Financial Services, at Business Insider Intelligence, where he leads Business Insider Intelligence’s Payments, Fintech, and E-Commerce coverage areas.

SHELAGH DOLAN (SD): WHAT ARE SOME OF THE EMERGING MARKETS YOU'RE WATCHING FOR FINANCIAL SERVICES INNOVATION?

DVD: Recently, I’ve been most interested in Brazil, China, Kenya, and India. And not coincidentally, these were featured in a recent report of ours which highlighted key global regions for payments. Each region is interesting for different reasons; Brazil has a robust and growing card market, China is the global leader in mobile wallets, Kenya is the birthplace of mobile money, and India is experiencing a rapid government-prompted pivot from cash.

SD: WHAT ARE SOME OF THE MOST MATURE MARKETS FOR FINANCIAL SERVICES?

DVD: On the developed side of things, other than the obvious (US), I’d highlight Australia, Sweden, and the UK. Australia is a market where government initiatives and regulations are driving payments change, Sweden is a great example of a post-cash society, and the UK is leading the way with contactless card adoption.  

SD: WHAT ARE SOME NEW FAST-GROWING PAYMENT TYPES TO WATCH?

DVD: IoT payments are about to have a moment. And by “IoT payments” I mean retail, person-to-person, or bill payments through connected televisions, connected cars, wearables, and smart speakers. In total in the US, we project volume through those categories to more than triple from $20 billion in 2018 to $62 billion by 2023, on the back of rising consumer usage of those devices as well as growing consumer familiarity with voice commerce.  

SD: ARE THERE ANY PAYMENT TYPES WE’LL SOON BE SEEING A LOT LESS OF?

DVD: Checks, although New York landlords seem to have missed the memo. And cash, although regulation and holdouts (looking at you, bodega operators) will make it a slower death. We also predict slower forms of ACH (Automated Clearing House) to drop off as faster payments take their place.

SD: WHAT'S THE MOST INTERESTING DIGITAL FEATURE YOU'VE COME ACROSS?

DVD: On the banking side of things, I’d point to account aggregation, which is the ability to view multiple accounts, credit cards, and other financial accounts in one portal. It’s been around for a long time, but it’s catching on now thanks to strong customer demand, increasingly powerful budgeting use cases, and international open banking regulations.

SD: WHAT ARE SOME OF THE MOST POPULAR DIGITAL FEATURES WITH CONSUMERS? WHAT ARE THE MUST-HAVES?

DVD: People love security features. Of the 30-odd features I mentioned, the three that came out on top in our survey are the ability to turn a card on or off temporarily, the ability to tell your bank that you’re travelling in mobile banking, and the ability to file a card transaction dispute. 2018 was a massive year for data breaches, and that could be part of what’s behind the high demand for safety-related capabilities.