Fintech has been called a lifeline by a number of people who have been struggling during the COVID-19 pandemic. The crisis has accelerated adoption of apps and services, with Hispanic and Black consumers leading the way, according to recent research.
Both Hispanics and Blacks are more likely to use fintech apps — 62% and 59%, respectively — according to the survey. A lower percentage of Anglos — 56% — use them. For these minority populations, fintech services help them overcome institutional banking barriers and geographic barriers such as rural residents having no bank locations or “banking deserts” for urban minorities where there are no banks either.
Overwhelmingly those using fintech said it gives them more control, as well as saving them time and money in interest and banking fees. Consumers who use fintech said they saved over $360 a year versus traditional banking. That means so much during the pandemic, when every dollar counts in the communities that have been hit the hardest.
According to the survey, 14% of low-income consumers have had their first experience with fintech and it went so well that three-quarters of them said they will use fintech to solve other financial service problems. Lower-income households — those earning less than $50,000 per year — have been using fintech to manage their cash flow, with 64% of respondents saying it gives them greater control over their bill paying than traditional banking apps.
This is great news for underbanked or unbanked Hispanic consumers, who can expand their ability to save money and broaden their financial service usage to better their lives. Things like starting a savings account for emergency funds are particularly important with so much uncertainty from the economic toll of the pandemic. Marketers should really be listening to what Hispanics need to help them improve their financial footing and expand their usage of these tools to attain life goals and reach financial priorities.
The rapid acceptance of fintech apps has demonstrated the public’s willingness to accept more digital tools and platforms, forcing businesses to examine whether or not they are responding quickly enough. When the pandemic is finally behind us, long-term priorities can once again come back on track and it will be important to refocus on the growth of the Hispanic market and youth. This is a consumer group that needs special consideration to get it right. They are the future, especially Latina entrepreneurs who will come roaring back post-pandemic.