The Future of Financial Services is Mobile and Instant

It's now or never

Customer expectations are often running ahead of the available options, creating a gap for innovators to fill. In the financial services industry, the speed of service delivery without security and quality compromise became a cornerstone of the development of highly competitive alternatives to institutional portfolios. As a part of market penetration strategies, technology startups ‘spoiled’ customers by bringing up the benchmark of service delivery so high, that anything less than instant is almost unacceptable. Meanwhile, nobody canceled the high quality of service and appropriate risk management (although, new ways to measure the risk had to be developed to speed up processes).

Alternative lenders, in particular, came forward with solutions that can deliver a service in a much more efficient manner to a wider customer base, whether private clients or small businesses. The year 2015's data suggests that online lenders approved a little over 70% loan applications they receive from small-business borrowers – the second-highest rate after small banks, which approved 76%, and much higher than the 58% approved by big banks.

While an outstandingly high level of approval contributed to accelerated traction, it is, however, not the key hallmark we need to pay attention to. Even with the APR of well-known business lenders exceeding 100%, the speed of funds infusion with technology-focused companies is a major advantage alternative lenders have over traditional sources of loans. The ability to offer suitable options in less than 5 minutes and funds delivery within 24 hours, has proven to be equally important and attractive to small businesses and private borrowers to cover immediate expenses (even literally immediate with loans given out as soon as 60 seconds).

InsurTech startups represent another class of innovators that leveraged the speed of service delivery to get ahead. As shared by the Huffington Post, Joshua Dziabiak, Co-founder and COO of The Zebra, sees a world where consumer’s expectations will demand nothing less than services that can be handled immediately.

Consumer’s expectations are increasingly aligned with companies that provide immediate, alternative solutions to everyday life tasks, he noted. People expect things to be instant – whether you’re talking about a package delivered from Amazon Prime or a ride appearing at a swipe of their fingertips via Uber. The edition emphasizes that companies that are succeeding in the future will be focused on increasing the satisfaction of their user experience.

If it's not good on mobile, it's [probably] not relevant

Another important element of a successful in the long-term business is the ability to meet needs when and where the customer finds it convenient. Not only do mobile technology and mobile-centricity overall play a significant role in democratizing financial services, they also fuel stronger engagement and loyalty. A study by Google called How People Use Their Devices suggests that more than one in four users only use a smartphone in an average day – almost twice as many as those who only use a computer. Moreover, the study indicated that smartphones take up the most usage time on an average day – those who use a smartphone spend almost three hours per day on it.

A significant part of the global population lives in a mobile-first world, consuming or at least performing a research on a range of financial services on smartphones. Consumers want to use smartphones to make mobile payments with smartphone manufacturers playing an increasingly important role in the payments landscape. Moreover, very successful alternatives to conventional banks are mobile-only and over a third of global online transactions are now mobile. In addition, ~90% of mobile data traffic will be from smartphones by the end of 2021.

Mobile will become a primary platform for payments and insurance businesses – some of the most successful technology companies are specifically tailoring their solutions for mobile devices to offer the best experience on a smartphone. PayPal and Venmo can arguably be placed among the benchmarks of mobile payments services delivering a superior mobile experience. With insurance, some new very interesting solutions are specifically built to address circumstances that require mobility of the user (while traveling, on the airplane, on the move). Examples include Cuvva, Sure, Cover, Slice, and many others.

Today’s consumers want to be able to get educated, get a quote and buy a policy from the comfort of their home or car via smartphone in less than 15 minutes, noted Vladislav Solodkiy, who founded a Singapore-based VC firm Life.SREDA, adding to the points on both instancy and mobility of innovative technology.

Commerce is another important area where in the years ahead mobile may become a single most important channel defining market success (if it isn't already). The ability of brands to connect with their customers outside the store is vital to prosperity with mobile being the primary way to do it. Research results published by Google in April suggest mobile shopping-related searches increased 120% in the last year. For retailers, it means that mobile is the channel to increase foot traffic and sales in physical stores. Smartphones have almost become the extensions of our hands as we reach for them for any question related to shopping or otherwise.

A smartphone is a consultant that retailers can tune in their favor. Given that the research found 82% of customers performing a research on the items on their smartphones, retailers can aid in finding the necessary information to facilitate a potential purchase.