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The rise of mobile fintech

by Mark Rosner on May 25, 2017

The changing behaviors of a new generation of mobile-first customers demanding a highly engaging smartphone experience are driving fintech forward. As mobile continues its inexorable climb to become the leading tool of digital commerce,  the mobile-first fintech market is driven to evolve so quickly that our entire experience of money as it is in 2017 may be completely unrecognizable in another decade.

Complex financial instruments for borrowing and investing, organized scams, and economic meltdowns too complex for a Harvard MBA to explain have led consumers to become, at the least, fearful of dealing with traditional financial institutions, and in some cases, downright hostile. The Average Joe feels like banks aren’t built to look after the little guy anymore and distrust abounds. Fortunately, innovation and free markets emerge where there is a service vacuum. A whole new category of fintech companies focused on mobile-first consumers and businesses has rushed in to re-redefine our experience of finance, from the smartphone up.

Square has done a brilliant job of simplifying the mobile payments experience for both vendors and consumers while Venmo has made e-wallets approachable for millions of mobile users by focusing on a safe, secure solution for ‘friends and family’ and even allowing sign-up via Facebook. Acorns’ “spare change” has introduced a new approach to investing that is at once immediately understandable and easy to get into. We can also now use apps to instantly apply for loans (Branch), and mortgages (Movement), pay off student loans (ChangEd), or gather digital coupons to save money or earn cash back (Ebates). Businesses, from SMBs to global enterprises, can run their entire financial operations – quotations to invoicing, payroll, budgeting, and even tax management – all from their smartphones.  

Even traditional financial institutions are getting wise. The power is pivoting back to the people in terms of intelligent investment advice, analysis tools, and execution options. In the best scenarios, banks are figuring out that financial technology is not a replacement for customer service, but a way to improve it. And in a mobile-first world, when customers get high-quality service and the ability to manage their finances anytime, anywhere, there are few reasons for them to stick to traditional banking. More and more people are even willing to pay for the instantaneous convenience that mobile banking provides.

In going mobile, banks are echoing the strategies of retailers who use mobile apps to bring customers into their stores. Online shopping isn’t going anywhere – people who do shop online make most of their purchases there  – but retailers are successfully leveraging mobile to increase in-store traffic despite the mobile shift. And the smart retailers recognize that personal service is the one thing they can offer customers that e-commerce can’t. Similarly, with so much less demand for transactional services due to mobile banking, bank branches are shifting to be more service oriented, and only one part of an omni-channel solution.

That said, the move toward a cashless society continues. People will always want a personal connection with and understanding of their finances, but the ability to get this at their fingertips (literally) is becoming more of a reality. The rise of Apple Pay and Android Pay are reaching the mythical tipping point, especially in the UK, where over 50 percent of retailers now accept NFC payments at the point-of-sale.

As new technologies gain acceptance and evolve, we’ll see innovative upstarts and banking stalwarts alike continue to create mobile experiences that provide us more and better utility. The barriers that make finance unapproachable, or disintermediate us from our own money, credit, and personal financial data, will continue to fall away, and new marketplaces will form to connect us, educate us, and allow us to exchange currency transparently.

Mobile natives – who have never known a world without smartphones, or a world with checkbooks – want what they want, how they want it, and they want it now. It’s that simple to understand and that hard to do.

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Mark Rosner is AppLovin’s Chief Revenue Officer.

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