Is the Future of Fintech Mobile?

We are a mobile-only company. We believe that everyone should be able to access market leading investments. What better way to do so than through the device in your pocket that is safe, convenient, personal and secure.

However, I have been asked by both potential investors and employees alike why go through the effort of developing a mobile app? Why not just have a website?

My answer usually includes a cliched reference to Wayne Gretski's famous quote "Skate to where the puck is going to be, not where it has been". That said, I thought it worthwhile to gather some data to answer the question is the future of fintech mobile?

Let's start with some technology trends. By March 2019, 4.4 billion people were active internet users with the number of smartphone users in the US over 257.3 million (this is over 78% of the total US population). Globally, the global mobile population is estimated to be over 3.7 billion unique users. The trend line of mobile internet is undeniable. Mobile internet has grown 504% since 2011 and overtook desktop access way back in early 2017. By the end of 2018, 52.2% of all website traffic worldwide was generated through mobile phones.

Ok, so let's take it as a given that more and more people are accessing the internet through their mobile phones. The next critical question is what they are doing on the phones. The cynic in me says procrastinating - the data is not far behind.  Out of the 4.4 billion internet users, almost 80% are social media users. Here are the results from a recent survey of phone activity by Statista.com:

The next critical question is are consumers using their browser or a mobile app to do what they want to do. Well, statistics vary but on average consumers spend 3 hours and 43 minutes on the phones with 90% of US consumers spending their mobile time in apps - that's a whooping 3 hours and 27 minutes every day spent using mobile apps!

The growth of the mobile app market has been incredible over the last few years. When the iPhone was first launched in 2009 there were only 65,000 apps in the App Store - now there are 3.262 billion with the forecast total revenue for mobile apps at over $460 billion for 2019! Again, looking at recent Stastica.com survey data we can get a sense of the largest mobile app verticals.

The attentive reader will note that mobile banking or access to financial services is not in the list above. However, the question I first posed was "is the future of fintech mobile?" and not "is fintech currently mobile?".

Instead of arguing whether or not consumers will access their personal finances in the same way that they play games, chat or watch a video on their phone,  a better way would be to look at the uptake of mobile payments or mobile banking to see if the capacity for a mobile interaction with money is likely.

They data here is strongest in China, the global market leader in mobile payments. WeChat Pay is the world’s biggest mobile payment platform and has over 1 billion users with over 90% of all transactions in major cities like Shanghai going via either WeChat Pay or Alipay.  When you look at the forecasted share of payment methods it's clear that mobile payments are likely to dominate in the near future.

What has driven this trend is arguably the convenience of a cashless and cardless world, the added biometric mobile security and the ever improving ease of mobile app user experience. I foresee the same trend line for mobile banking and mobile investing, which can provide the same convenience and security.

Obviously, the challenge of mobile churn remains - more apps are deleted after downloading than kept because despite the ever increasing capacity of smartphones it is a fight for space on a consumers device. However, I believe there will be eventual winners in key verticals in every market. Everyone will have their preferred chat app, streaming app, sharing app, navigation app, shopping app, weather app, banking app and, of course, their preferred investment app on the smartphone!

In conclusion, I strongly believe that the future of fintech is mobile and I'm hoping that more and more people see the opportunity of buying back their life and taking control of their personal finances by investing in low-cost, high-performance funds that help them realise their dreams. #BeFranc