Bumped's 2022 forecast: What's next for Fintech
Cryptocurrency, industry consolidation and AR/VR...oh my!
Over the last couple of years, companies and individuals alike have been challenged with adopting a ‘new normal’ which has set forth a new way of doing everything — from how we learn, work, and play, to even how we shop, pay, and bank.
As we embark on the beginning of 2022, brands and banks will be turning to new and emerging innovations that will shape the future of their industries behind the pandemic ‘new normal’, and instead how they will operate and engage with their customers for years and even decades to come.
Our unique position between the brand and fintech industries lends us a perspective into the major trends driving the intersection of the two. We sat down with our executive team to hear their thoughts on what we can expect in these spaces over the next year.
Read on to hear fintech predictions from our CEO and founder, David Nelsen, CRO Babak Farrokh-Siar, and our VP of Customer Solutions and Strategic Alliances, Drew Howell.
“2022 is the year of the ownership economy.”
David Nelsen, CEO and founder of Bumped
Zero coins or cash. We're well on our way to a truly cashless future.
We probably all experienced a merchant or two throughout COVID that literally couldn’t transact in cash. What do you do when the bank can’t give you quarters? When it comes to predicting the next year’s biggest trends or products, most of those innovations are already here and just waiting to be discovered. One that has continued to gain even faster traction as of late are the technologies, products and apps that power cashless transactions.
While COVID was the springboard for the move to cashless payments, I believe it is the younger generation that will first operate entirely cashless — with zero coins, cash, or even a traditional wallet in their pocket. Therefore platforms and technologies that support tomorrow's generation will represent the biggest innovation in the next 12 months.
Consumers are ready to participate in [complex] financial systems. Say hello to the Ownership Economy.
2021 was the awakening of the retail investor, so what will 2022 hold? Following the haze of AMC and GameStop, consumers came out on the other end eager and ready for more. Over the next year, we will see financial institutions and fintechs offer consumers not only more education and insights to be better informed, but greater access to emerging currencies and rewards to become part of our — sometimes complex — financial system.
If last year was the year of the retail investor, 2022 will be the year of an ownership economy, where every consumer regardless of disposable income or background will have an opportunity to get a piece of the ‘economic pie’. In this new reality, it’s up to brands to keep up and constantly invite their customers. Whether it’s cryptocurrency today or a new global currency tomorrow, the consumer is a part of the story.
“The fintech industry is ripe for consolidation.”
Babak Farrokh-Siar, Bumped’s CRO
The way we pay will change the retail experience as we know it.
While the trend of curbside pick-up, at-home delivery, and contactless payments may have skyrocketed during the COVID-19 pandemic, these shopping behaviors are here to stay. Consumers now expect their favorite brands and retailers to meet them where they are and accept their preferred form of payment.
Looking back over the past two years in the pandemic, the power of how we pay has greatly influenced the shopping experience, and fintech innovations will change the retail industry for years to come. Expect more scan and shop environments, and VR malls, with personal avatars with digital bank accounts. The traditional shopping experience is in the rearview mirror, with fintech in the driver’s seat.
AR/VR is the next frontier of digital banking.
The concept of virtual reality and augmented reality aren’t new by any means however, big brands are empowering the adoption of this technology among the masses. Take the shift of Facebook to Meta, followed by their announcement of creating a Metaverse. With big tech looking to create new VR and AR environments for consumers, customers will soon expect their favorite brands and banks to meet them where they are — in these new realities.
Over the next year, banks will begin to do their due diligence around AR and VR to truly understand how consumers will interact with this new paradigm and what brand trust looks like in this environment. You’ll see banks seeking out new technologies and solutions that will enable them to be part of this new reality and create a safe and secure space for users. Could this be the beginning of virtual banks, with virtual assistants? 2022 will be the year of exploration.
Industry consolidation is in the cards for Fintech.
Twenty years ago or so, we saw the banking and financial industry consolidate, banks big and small coming together to create a handful of major players we are all familiar with today. Now the fintech industry, with nearly 27,000 fintechs globally, is ripe for consolidation.
In 2022, expect to see traditional banks and financial institutions acquiring, merging or partnering with startups, neobanks, and fintech companies for new customers, innovative technology, brand recognition, and a strong purpose-driven and value-based business that aligns with their business.
“ Crypto is hot — but make sure to choose your partners wisely.”
Drew Howell, VP of Customer Solutions and Strategic Alliances at Bumped
Banking-as-a-Service (BaaS) is here to stay.
From being an interesting concept being put into motion pre-pandemic, Banking-as-a-service (BaaS) adoption is being accelerated — as are the number of players providing these services. Venture capital funding is flowing into the space, and competition amongst players — new and established — is only increasing, if the volume of neo-banks can be used as one proxy for market presence and saturation.
‘Build’ is becoming less and less of a contender in the debate of ‘build vs buy’. In the precious time deciding or creating from scratch, your competition may pass you by.
Crypto is hot. But when and where will the saturation point be reached.
The significant presence of crypto and the associated technology will come as no surprise to any watcher of the financial space, particularly during the last 18 months of the pandemic economy. Based on my unscientific polling and series of conversations throughout the last year, the volume, number, and diversity of crypto players is steadily increasing.
This signals first to the significant consumer, industry, and venture capital interest in the space. Secondly, it demonstrates how relatively uncharted the landscape is for crypto companies. And third, the land grab and shere volume of players portends that the space will have winners and losers, perhaps soon.
While the crypto market seems to only have one direction currently (up), the market surely cannot support all players currently in the space. My prediction? 2022 will be the year the winners will come out on top. Choose your partners wisely, especially with scale (and longevity) in mind.
The battle for the customer's wallet has never been more intense.
Card issuing is digital, rapid, and ubiquitous (and getting more so). Alternative financial product providers, neo-banks, brands - they all are battling for consumers’ wallets. The rapid growth in digital card issuing has lowered the traditional barriers in time and cost for deploying new products into market, and players large, small, unknown, and well-known are all deploying their own financial card products, vying for the coveted spot at the top of consumer’s digital and physical wallets.
Next-generation reward offerings will be one piece that helps marketers punch above the noise floor. Digital experiences will be another. Again, time will tell how consumers respond and how customers will sift through the noise to find their new, favorite card product. The one thing that is certain is that competition has never been more intense from established players and new market entrants alike.
Financial institutions need to think outside the traditional banking box to engage customers and get to the top of wallet. Now is not the time to hesitate when it comes to impressing your customers or to think about something new or different.