The financial technology revolution is now spreading around the world and affecting various processes in sectors such as customer service, financial advisory, payments and transactions, lending, insurance services and account management. Today’s customers are looking for the next generation of financial service providers with a human-centred approach. As a result, the global financial landscape is changing and innovating constantly to meet their expectations.
The impact of the disruption can be seen throughout the industry and is highlighted in these statistics:
Given these facts and the growing global importance of the Fintech industry, we wanted to take a closer look at the biggest trends that will be dominating mobile app development in Fintech for 2020.
To do this, we spoke to eight industry experts including N26 Inc., Spendesk, Dreams, ABBYY, Financial Data Exchange, Pundi X Labs, Diamond NestEgg and our own expert asking them about their predictions for mobile development trends for 2020 in Fintech.
So let’s see what are their predictions for the upcoming year and what they mean for the industry.
The aim of financial applications is to quickly complete the user’s every action, a payment for instance. While social networks or gaming apps are fighting for the time spent inside the apps, financial apps should not try to compete for the user's attention. Consumers expect extreme simplicity on mobile even for such complex processes as financial transactions. That is why at Spendesk, we want our users to spend as little time as possible in our app – we believe that the best finance app will be the one that is the simplest to use. To make that happen, we automate as much as we can and simplify manual tasks, e.g. by using OCR to prefill VAT and supplier information on a scanned receipt, by automatically adding relevant information about the tax accounts of suppliers, or through auto approving certain expenses without requiring manual steps. Moreover, we got rid of distractors to provide users with maximum usability. For instance, we redesigned the home page, which used to show too much information – now it only shows actionable items.
Raphaël Moutard, Engineering Manager at Spendesk
During the days of booming platforms and an increasingly higher level of disparity in devices our target customers use, the notions of high accessibility and multi-platform compatibility are at the top of my own personal list for 2020.
Combined with the ever-present expansive fintech mindset of acquiring new markets at a high pace, the speed of iterations and experiments constitutes the third aspect that gives some room for improvement.
Native codebases (Kotlin, Java, Swift, Objective-C) struggle to meet the demands of putting smaller, iterative releases in the hands of users rapidly. Adding the demands to keep the product functional across iPads, Android Tablets, various iPhones with an increasing lifetime and other phones running the full spread of Android versions makes for a slower, more risky and traditional release schedule where features come at a higher price.
At Dreams, we believe Native Engineering for app development has its place. It excels (and is, in fact, still the only good option) when it comes to beautiful device-level APIs and services: Sign in with Apple, Google Play Install Referrer, health-related APIs and a wide spectrum of other gems. However, it is no longer the only solution for situations when an organization needs to embrace lightweight engineering in order to be truly able to achieve agility in key fast-moving product areas.
Dividing and conquering between the few core product experiences and the leaps; picking the tool allowing for the best possible match of speed and quality moving forward is the smart choice. For our expansion into Europe, that means embracing Progressive Web Apps wholly and fully. Realistically, we can’t miss out on the great APIs and services provided by the mobile OS ecosystems. We also need the exposure Google’s Play Store and Apple’s AppStore bring in terms of being storefronts.
Didde Brockman, Co-Founder and CTO at Dreams
The fintech landscape is evolving and consumer expectations are changing in concert. So much of the effort in the space is going towards building experiences that make consumers feel in control of their own financial health and future by creating an intuitive user experience. At N26, we have implemented instant transaction notifications that include personalized insights, helping users understand how they are spending their money and what they are spending in each category. This helps us understand what they care about and what their needs are, ultimately helping us make their interactions with N26 effortless and natural.
The services and the technology that powers them are important, but users are increasingly drawn to user experience above all. It can convey transparency, intuition, and reliability as strongly as any core functionality, and it’s arguably more important when it comes to keeping consumers in the long run. They may be drawn to a feature, but they won’t stay if it’s hard to use. That means design can’t be an afterthought to the development process; it must happen in lock step with technical innovation. That's why design is at the core of everything we build at N26.
Ryan Cooke, Head of Technology for N26 Inc.
The number one trend in Fintech is the increased use of mobile phones for onboarding and registration.
User experience is a priority for banking and finance because clients want a quick and seamless process. In fact, IDC research shows that the banking industry will invest more money next year than any other industry in new AI technologies like content intelligence (an increase of 39 percent) with improving customer experience being a priority.
One of the best methods for improving customer experience is with data capture via mobile for submitting supporting documents at registration, e.g. proof of address/pay stubs/utility bills. This can be done either with a native app, or through new mobile web capture, software development kits (SDKs). I believe this will be huge in Fintech in 2020 because it can add real-time image and data capture to the bank's mobile website/browser. This way, organizations can onboard new customers more quickly by enabling them to take a photo and upload supporting documents within mobile web pages to increase customer acquisition.
As soon as the user points the camera at a document, the technology automatically captures an image of the best possible quality in a live video stream, eliminating the risk of errors and increasing the accuracy of the captured data in the backend. It’s therefore easy to see the benefits to lenders from improved efficiencies with mobile onboarding, as mobile becomes the preferred channel of engagement for customers seeking loan applications.
Dr. Marlene Wolfgruber, Director of Product Marketing at California-based ABBYY
I believe that 2020 will be the year of the informed digital consumer who is demanding greater control over their personal data and will affect how mobile apps are developed. This call for transparency in data sharing will impact developers, data access providers, financial institutions and others up and down the line.
Consumer demand has driven massive innovation in mobile and online financial services. This has empowered consumers and small businesses with the tools to better understand how and where they spend their money, manage their finances, increase their credit scores, prepare their taxes, verify accounts and balances, and aggregate disparate financial and investment accounts. The tradeoff: the required financial data is traditionally collected through an automatic process which depends upon consumers to permission access through the sharing of their financial institution login credentials.
In the United States, we’ve seen the financial services ecosystem address this issue collectively and promote a better way forward. A year ago, the Financial Data Exchange (FDX) was established as a coalition of financial institutions, aggregators, financial technology companies (“Fintechs”), and other financial services providers. Our mission: promote next-generation technology and move toward the adoption of a common application programming interface (API) standard, the FDX API, to access consumer financial data. As both financial institutions and Fintechs adopt the API, this will lead to the phasing out of consumers having to share their credentials.
Consumers will encounter fewer instances where they share their login credentials with third parties. The FDX API uses a tokenized authentication method, which allows consumers to log in directly with their financial institution to authorize data access. As part of our Control principle, we will also see more and more banks offer data access “dashboards,” such as Bank of America, Citibank and Wells Fargo. These tools allow customers to manage, edit and revoke access to their data easily.
Don Cardinal, Managing Director of the Financial Data Exchange (FDX)
The number of cryptocurrency wallets continues to grow. According to Statista, the number of blockchain wallet users has increased 35% in 2019. The trend of mobile app development in Fintech for 2020 will be a hybrid model of attracting users to spend more time in the app. For example, we've already seen a bank app that includes both fiat currencies and cryptocurrencies. A blockchain wallet app integrates multiple public blockchains. A cryptocurrency wallet app can offer both custodian and private wallet features as well as integrating a chat app so that the users can send their digital assets to their contacts through an instant messenger without scanning or keying in long address.
Take our XWallet for example. It has gained even greater engagement ever since we integrated the feature that allowed users to send cryptocurrencies through Telegram. The function is helpful, fun and easy – an example of how a winning user experience can easily sway more users to adopt more innovative payment solutions. We also see the rising trend of “gamification” in app development, e.g. getting rewarded for completing certain tasks. It serves not only as a way to attract the younger generations but also increase their engagement.
All in all, the mobile apps of the next decade are the ones that will champion the user. The apps that will provide the best experience for a specific market will be the one to win the industry. As users lean towards authentic, meaningful experiences online and offline, it’s getting more and more difficult to keep them engaged for a long time.
Peko Wan, Chief Ecosystem Officer, Pundi X Labs
The increasing complexity of new regulations in the finance industry leads us to complicated and not user friendly experiences. For example, the MIFID II Directive focuses on protecting users and assessing their willingness to take risks in investment. Although this noble idea’s goal is to help the user, it provides an additional level of inconvenience when you want to easily use your app. As Deloitte points out in their report, Machine Learning with Chatbot technology can help to simplify clumsy user interfaces. Instead of an ugly questionnaire, a friendly Investment Assistant can guide you through a complicated financing world.
This idea of chatbots in the banking industry can be extended to any customer servicing functions. Natural Language Processing is advanced enough to provide a great experience when dealing with frequent situations, or to escalate to a human specialist when the problem is more complex. For example, instead of spending hours on the phone waiting for customer support when you want to change the password of your banking app, you can ask a chatbot for help that will run all necessary verifications and automate the process (as in the following example of our concept of Conversational User Interface with AI).
Krzysztof Jackowski, Mobile Deputy Engineering Manager in Netguru
Everyone thinks that they can build an app, and customers will come. But financial services is a relationship-driven business, where the human factor is crucial: people want to speak with people.
If you take Millennials and mortgages as an example, Millennials will go online and search for all the information they need on mortgages, but before they actually make that big decision to go ahead and sign the necessary documents, they want to speak with a human being that understands their needs and concerns, and can answer the remaining pressing questions they have on their mind.
There will always be a segment of the market that loves full automation – look at Amazon and e-commerce – but with major decisions, you can only automate so much. Because the moment a client has a serious question, they don't want to be handed over to a robot, no matter how "smart" or how seemingly human the robot may appear. They want to deal with other people.
You cannot survive in financial services without technology, but technology itself is not enough. There are thousands of companies offering similar things, so differentiation has to come from sources other than just pure product.
Technology and the speed of innovation have changed the way we do business A LOT, but some fundamentals will never change. We need to do more than just build the best apps, we need to employ and support the best people, have the best marketing and distribution strategy, embrace the best company culture, and most importantly, make the customer the king.
Jennifer Lammer, CEO of Diamond NestEgg