Ingo Money: 2021 was the year of the show
The changing world of payments in 2021 has led to a surge in new accounts as companies ranging from FinTechs to insurers look for ways to grow their customer base by offering the quick and easy options consumers demand, says CEO of Ingo Money, Drew Edwards. Read his thoughts in the PYMNTS Ebook, “In a nutshell: 50 thought leaders sum up 2021.”
I realize that’s probably not the word we expected. There may be easier or more obvious choices, but in a year marked by the rise of digital challenger banks and neobanks, the closure of physical bank branches and much of the world stuck at home, there is no there is no more precise word.
The lasting financial legacy of the pandemic will likely be a final and definitive move to digital. A potent mix of pandemic restrictions, financial need and convenience has driven a massive shift in digital adoption, triggering a digital grab by providers for customers.
More and more FinTech spectrum disruptors have begun to deliver digitally-focused online and mobile experiences, new services and strategic business initiatives to rapidly grow their customer base. The obvious decision was to start offering bank and credit card accounts in addition to their own savings, early access to salaries, remittances, investments or other products. Revolut’s plan to launch a credit card in the US market and Digit’s new bank account offering are prime examples.
Challenged by these disruptors, legacy financial services companies and even retailers have joined the fray. From Liberty Mutual and Geico modernizing how they pay claims to Fortune 500 companies launching their own challenger banking brands, the pressure was on to modernize.
New accounts have become the currency of these offers. Disruptors and Legacies pushed new bank and credit card accounts to attract customers. The result was a flurry of new account issuance.
According to Statista Research, the top seven challenger banks in the US alone grew their user base by 40% between 2019 and 2020. Most of these new users represent new accounts, with the total number no doubt growing further. more in 2021.
The ability to offer these accounts has been made easy and flexible by dozens of reputable companies like Galileo and Marqeta, who have modernized the issuance of new accounts, allowing a quick jump into the game. Of course, the next challenge for all these new accounts will be bringing money in and out. In line with digital customer expectations, businesses offering deposit or payment capabilities must then be able to provide safe, smooth, and instant funding to and from any account a customer chooses.
Meeting the growing demand for “money mobility” means offering inbound and outbound digital transfer capabilities, check or cash funding, bill payment, and truly robust peer-to-peer (P2P) services. It’s a much less commoditized space, and it will ultimately be where these new issuers win or lose customers.
The reality is that we no longer live in a world of one bank account and a lifetime banking relationship. Consumers open accounts in a snap for many purposes – and they expect speed, convenience and choice when it comes to their money. They will vote quickly with their wallets if suppliers fail to deliver on this promise.
So while the defining trend of 2021 was certainly the issuance of new accounts, 2022 will be a year marked by monetary mobility.