How mobile finance is developing around the world

By Isabel Ferreira, Director of Sales, UK & Ireland at Adjust

The way we manage our finances has changed dramatically over the last decade. Experts believe that 72% of adults in the UK will use mobile apps for payments and transactions by 2023. In fact, according to Adjust’s latest Mobile App Trends 2021 Report, the average user now has 2.5 finance apps installed, and global payments reached USD $1.390 billion in 2020 and are projected to reach USD $1.680 billion this year.

As developers have continually found new ways to innovate mobile finance, the vertical has gone from strength to strength, changing the landscape of personal banking and how businesses interact with their customers. In this article, I explore how mobile finance is developing around the world and the popular trends commonly seen in fintech apps.

Fintech’s emerging markets and industry leaders

Due to the near universal presence of mobile devices, it comes as no surprise that the adoption of mobile payment solutions is increasing worldwide, consequently driving growth in non-cash transactions. Though what I find especially impressive is that many banking apps are beginning to emerge to provide these types of services in locations where users previously had no access to a bank. For example, socially-focused mobile payment platform Netzme has set out to transform mobile finance in Indonesia. Netzme takes a social approach to mobile finance to help unbanked users in rural areas. ItsCo-founder and CEO Vicky Saputra started the company after he realised that “financial inclusion and financial literacy is quite a big issue [in Indonesia], especially for people in small cities and rural areas.”

Changes to the banking industry have been driven by ambitious start-ups and leading traditional banks alike. British multinational banking company Standard Chartered, for example, has embraced this digital revolution with their own virtual bank, Mox Bank. Mox Bank CEO Deniz Güven recently explained to Adjust that “you cannot differentiate in this kind of market with just a new mobile banking app. You have to give a reason for customers to change their banks, which isn’t easy.” Deniz believes “your bankable population can be 100 percent and if you’re not on mobile, you’re missing out on this market share.”

The future of fintech

While the banking sector has been adapting to digital disruption for several years, the Covid-19 pandemic has only accelerated the transformation, opening up access and opportunity to millions of under-banked consumers around the world. In fact, our Mobile Finance Report 2020 found that:

• Emerging markets are driving global growth:Thanks to the low market saturation of existing solutions and a pool of unbanked users, emerging markets – such as Turkey, Ukraine and Brazil – are seeing huge growth. These apps are often filling a need that was not previously supplied by traditional banking methods.
• Investment app activity is booming:According to Adjust data, investment apps are the second-fastest-growing vertical worldwide. From January to June 2020, the report shows an 88 percent growth in average sessions per day for investment apps.
• Payment apps have seen an average of 49 percent rise in sessions.The increase is even larger in Japan, which saw an increase of 75 percent. The report also showed  considerable increases in Germany (45%), Turkey (39%), the US (33%), and Great Britain (29%). This was likely a result of social distancing rules implemented as a result of the coronavirus pandemic, as mobile finance apps benefit from offering a more hygienic and convenient way to manage finances.

With such huge untapped potential across the world, here are the essential fintech trends you need to know when launching a new fintech app.

1. Machine learning capabilities: Big data is used by mobile finance app developers for operations such as user segmentation and personalization. According to market research company Forrester, 89 percent of digital businessesare investing in personalization. Machine learning is also important to tech developers because it can be used to create better user experience. For example, chat bots can be implemented to provide fast and effective customer services for users. Machine learning enables chat bots to develop and become more useful, which in turn saves the developer’s team from manual tasks. This is a 24-hour service that can also save users time by eliminating waiting times before speaking with a customer services employee.

2. Innovative payment methods: As mobile finance app developers continue to innovate new ways for their customers to complete a transaction, users are no longer limited to traditional payment methods that are not ideal for contemporary user habits. For example, QR codes and mobile wallets have become an effective way for users to easily complete a transaction, while also saving them the trouble of needing a physical wallet.

3. Flexible payment distribution: Some mobile finance apps are giving users more options for accessing incoming payroll. Instead of payday loans, which can take advantage of a user’s situation, flexible payments enable the user to gain access to funds in advance without relatively large interest rates. This feature gives users more freedom to distribute their money in cases of emergencies and unexpected costs that are due before payday.

4. Digital-only and mobile-first banks: The success of mobile-first banks is proving that a physical branch may not always be necessary. This can present a win-win scenario: the user doesn’t need to find a local branch to sign paperwork while banks save the cost of maintaining a physical store.

5. Automation: Automation has had a considerable impact on the development of mobile finance. The purpose of automation tools is to carry out any activities that can be completed without manual work. Fintech companies can use automation to speed up processes and reduce the workload of employees so that they have more time to utilize their expertise. Automation can also provide a better user experience. Examples include automated application status updates, balance information and confirmation emails.

6. Real-time reporting: Fintech app developers are always looking for innovative ways for their customers to stay up-to-date with their finances and investments. Real-time reporting means that users have immediate access to financial data whenever they need it. This is extremely valuable to users who want to act proactively to financial management and investments. Real-time reporting is fast becoming the industry standard – and an expectation for mobile users.

When developing a fintech app it is important to consider the features that will stand out from the long list of mobile finance apps available. When discovering your USP, you also need to address the following:

Customer support features: In addition to chat bots and other automated services, there will be times when users need to speak with an employee. This is an important step for fintech apps, as the stakes are high compared to other verticals. Ensuring that you have someone available is a critical step that ensures your users can trust your brand in any situation. To limit the frequency of when this type of customer support is needed, create a comprehensive FAQ page and ensure that your chat bots can address the most common complications when using your app.

Security features: The importance of security for fintech apps cannot be overstated. This is a critical factor for customers: if users have any doubts that your app is secure, they will uninstall and opt for another service. Features that contribute to a tightly secure banking app include payment blocking, two-factor authentication and a complex password requirement.

It’s been a fascinating year and a half for mobile apps as the pandemic has led to unprecedented growth in many verticals. While fintech apps were already undergoing a significant surge in most markets, they have received another boost as economies and user habits shifted to accommodate lockdowns and social distancing restrictions. It’s clear that consumers are continuing to trend toward mobile across all fintech sub-verticals – and companies are reacting to that by broadening their offerings and allowing for more options that void the need for face-to-face interactions. This increase in digital adoption coupled with the potential of untapped markets makes fintech an exciting and important vertical to keep an eye on.

Isabel Ferreira, Director of Sales, UK & Ireland at Adjust