With the use of financial apps soaring amid the coronavirus pandemic, fintech is the “new normal,” fintech entrepreneur Zach Perret said Thursday during the virtual LendIt Fintech USA 2020 conference.
Perret, co-founder and CEO of fintech unicorn Plaid, mentioned this as one of the findings of a consumer survey recently taken by the Harris polling organization on behalf of his company. Seventy-three of the more than 2,000 U.S. adults who participated in the survey described fintech as the “new normal,” and 80% said they now can manage their money without visiting a bank branch.
Fifty-nine percent of Americans indicated they had increased their use of fintech apps to manage their money during the pandemic compared with before the pandemic. Meanwhile, 57% of those surveyed said fintech had saved them time, 42% said it had saved them money, and 37% said it had eased stress or fear about money management.
“While COVID-19 served as a catalyst for increased fintech adoption, fintech isn’t a fleeting trend,” Plaid observed in reporting the survey results Sept. 15.
The data platform run by San Francisco-based Plaid powers fintech apps from the likes of Robinhood, Square and Venmo. In January, payments giant Visa agreed to buy Plaid for $5.3 billion. The deal is expected to close by year’s end.
During the LendIt Fintech session, Perret said people wrongly assume that “fintech” refers only to startups. Rather, fintech encompasses any array of companies, including the country’s three biggest banks. Wells Fargo’s tech budget this year totals $9.61 billion, with Bank of America at $9.14 billion and JPMorgan Chase at $8.91 billion, Business Insider reported in August.
The pandemic promises to accelerate fintech spending by banks, according to Perret. Technology-wise, banks are now trying to achieve in 12 to 18 months what they had planned to accomplish over three to five years, he said. This sped-up timetable comes as tech companies like Apple, Google, Microsoft and Samsung ramp up their fintech offerings.
“Fintech is not just startups. Certainly, some startups are doing really well, but the largest players out there, including the banks themselves, are really leading the charge,” Perret said.
Practically every big company is involved somehow in fintech, he said. For instance, Uber’s rideshare app features fintech capabilities.
As for whether fintech apps will end up being bundled into massive one-stop financial shops, Perret said he expects more app consolidation to occur, but he suspects consumers still will want to choose from a menu of fintech options tailored to their needs.
“I am excited for increasing optionality for the consumer. It might make sense just to stick with one financial institution for everything, and the consumer should have that option,” Perret said. “But likewise, if they need something else, it’s fintech’s … job to ensure that they have those [tools] available to them.”