Review of current and future trends in fintech
This is part of a series on banking and ATM trends in 2021 and 2022. Click here for the first article on ATM trends.
To say that fintech has exploded in recent years would be an understatement. Customers have increasingly turned to fintechs as an alternative or companion to traditional banking, and COVID-19 has only accentuated this trend.
However, traditional financial institutions and fintechs aren’t always necessarily enemies. Many institutions on both sides of the divide see the benefit of working together to reach new customers and support older ones with personalized banking experiences.
One of the ways this partnership is materialized is fintech-as-a-service. Banks can access and offer fintech solutions as a service to their customers.
With all of these trends in mind, we need to ask ourselves a question: “Where is fintech now and where is it going in 2022?” To answer these questions, ATM Marketplace spoke to Brion Bonkowski, CEO and founder of Tern, a fintech-as-a-service company, to get his take on fintechs.
Q. How has fintech evolved in 2021 according to you?
A. With the rise of DeFi, several major US banks, processors and traditional networks are finally strategizing on how to integrate DeFi technologies into traditional banking applications.
Q. Where do you see this in 2022, especially in the area of personalization of customer banking experiences?
A.Affinity banks targeting specific populations as neobanks or others have a tremendous opportunity to disrupt and continue to drive customers away from the top 10 banks with large marketing budgets focused on geographic areas, socio-economic backgrounds and / or a specific profession.
Q.Do you see fintechs and banks as rivals or intrinsic partners?
A. Definitely partners. I think banks are changing the way they perceive risk in their portfolios and opening up the possibility for fintechs to innovate in addition to their traditional banking product stacks. Every bank I speak with is looking for incremental ways to grow their non-interest bearing portfolio, and that usually translates into transaction income. FinTechs help banks run this part of their business, which makes banks more valuable.
Q. Can you tell us a bit about fintech-as-a-service?
A. The nickname “as-a-service” has been trending for as long as I can remember. But it really started with the rise of Salesforce, which has become a centralized hub for business applications. I see fintech-as-a-service as an activation platform for startups looking to disrupt existing players or businesses, looking to add new products or increase ARPU across their portfolios . At Tern, our directive is to help the world’s fintechs grow with easy-to-access tools containing several deployment options. FinTechs are constantly changing and adding services, and we want to be a trusted partner to help this evolution.