I’m a sucker for random holidays. On National Ice Cream Day, you can find me at the nearest creamery. And National Wine Day is a big excuse to drink an extra glass. So today, National FinTech Day, seemed like a great day to write a blog about two of my favorite topics – money and technology.
Earlier this year when the global pandemic began spreading across borders, the way we moved money changed in tandem. As a result, digital banking is finally having a moment and the demand for financial technologies is on the rise.
The Day Bank Branches Closed
Around April, many U.S. banks began temporarily closing retail branches to protect employees and to prevent the spread of COVID-19. Consumers and businesses alike had to change their banking behaviors at the flip of the switch. With limited in-person banking, the phone became the new branch. For example, the demand for mobile check deposit skyrocketed with Citigroup experiencing an 84% increase in daily mobile check deposits in May. And in April, a wire services representative at my personal bank said they went from a couple hundred phone-initiated wire transfers per day to tens of thousands, causing a huge backlog.
For many banks, these closures weren’t temporary. U.S. Bank had net 69 branch closures in the first half of the year. And PNC has closed 24 of its 2,300 branches since March 31 and plans to close 69 more by the end of September.
A Wake Up for Financial Institutions
Without the ability to walk in a branch and conduct basic transactions, financial institutions (FIs’) technologies and customer service lines are being pressure tested like never before. Banks face two big wake-up calls:
- According to McKinsey, 60% of customers under the age of 70 used digital banking tools in 2019 – a number increasing due to COVID. FIs have been out-innovated for years and now must partner with big tech and FinTech startups to accelerate digitization. For example, earlier this month Google announced that it’s partnering with six more banks to offer digital checking and savings accounts to Google Pay users in the U.S. Credit unions are also racing towards digitization, like Peoples Community Bank which recently inked a deal with Finastra for digital banking and more.
- Banks also have to innovate and build products in-house. For example, when the Paycheck Protection Program was formalized, banks and credit unions had mere days to build online portals for small businesses to apply for the SBA-backed loan. These portals also needed the functionality for SMB owners to track the status of their application, make edits if the application was incomplete or rejected, and electronically sign acceptance agreements. For a software company, propping up a web-based product like this is simple. But for banks operating on legacy architecture, this was a nightmare. And it was a huge wake up call that they need agile internal teams to swiftly build custom solutions.
Banking is about to change for good. As a top FinTech PR agency, here are two financial technologies we’re particularly excited to watch grow in the months ahead:
- Mobile Wallets. The Global Payments Report 2020 found that digital and mobile wallet payments already lead e-commerce payments at 42% of all spending. And as contactless payments become a must-have in a post-COVID world, this will increasingly become the preferred payment method for point-of-sale, too.
- Peer-to-Peer Payments. Consumers prefer the intuitive, efficient and social networking-like experiences that P2P platforms offer. ARPR’s client Paysend is a great example. It allows consumers to send money to over 90 countries in a multitude of currencies for just $2 – an invaluable service during difficult economic times.
If your software company needs a FinTech PR agency to support the next chapter of your growth, contact us today. Curious how we work in-action? See how ARPR helped a FinTech client break into the cryptocurrency market in this case study.