A key objective among FinTechs is to innovate new products that extend their brand reputation and market reach. For example, FinTechs are expanding their mobile features and capabilities and improving the user experience to retain existing accountholders and attract new customers.
Many — but not all — of these institutions have also set their sights on attracting Generation Z consumers. This digital-first generation is a growing market opportunity into 2030 and beyond, but some FinTechs don’t see the appeal. While 62% of FinTechs say attracting more Gen Z members is highly important, 95% of CUs say the same.
These are just some of the findings from “The FinTech Innovation Agenda,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration. The report examines how these FIs are innovating to meet the financial needs of consumers at CUs and other financial institutions. The report is based on a survey of 101 executives at FinTechs that provide services to CUs, commercial banks, community banks and individual consumers. Conducted between Oct. 16, 2023, and Nov. 10, 2023, the survey investigated FinTechs’ innovation priorities and plans.
Other key findings from the report include:
FinTechs understand the importance of delivering high-quality products and services. One strategy that 44% use is testing innovations with employees as part of their payment innovation process. Just 17% say testing with actual customers is part of their process.
FinTechs report a variety of strategies to improve their chances of retaining existing members and attracting new ones. Data shows that nearly 7 in 10 view improving mobile capabilities as key to meeting their growth objectives. In addition, 6 in 10 are investing in newly emerging technologies for the same reason. The report explores how these institutions appear to have digital-first consumers in mind as they develop their innovation agendas.
FinTechs face challenges that can slow their ability to launch their innovations. For instance, 34% say regulatory compliance is a challenge when bringing innovations to market. Notable shares identify integrating different systems and complex internal decision-making as challenges. Few mention a lack of resources, and even fewer say that a lack of budget is the biggest challenge.
FinTechs consider many factors as they build their innovation roadmaps for the next three to six years. One thing they seem to agree on is that innovation is key to retaining and attracting customers. Download the report to learn more about how FinTechs use innovation to drive growth.