Credit Crunch Consumer Insights

Trend - While personal finance management apps have existed for over a decade, the introduction of artificial intelligence (AI) and data collection algorithms have made recent apps far more effective than before. These modern budgeting apps are used to prevent unnecessary spending while saving toward goals.

Insight - The extensive convenience of modern e-commerce platforms, such as Aliexpress, Temu, or Amazon, has led to consumers from Gen Z to older Millennials constantly facing targeted product advertising. This has led to an impulse spending problem in many consumers who purchase frequent low-cost products, unaware of how quickly these purchases add up. More tech-savvy Gen Z and Millennial consumers, in an effort to curb this aspect of e-commerce culture, are turning to budgeting apps powered by AI.

Trend - Brands are releasing credit-building debit cards and financial services designed to help individuals establish or improve their credit history by using other payment methods. These non-traditional methods typically involve spending one's own funds rather than borrowing money.

Insight - Good credit provides access to a range of beneficial financial opportunities, and this correlates to consumer demand for tools that simplify this area of finance. Establishing credit through traditional banks and credit bureaus can pose challenges, especially for individuals with a limited credit history or insufficient financial resources. These individuals turn to credit-building services as a way to expedite the credit-building process and to provide a sense of assurance regarding financial matters.

Trend - As Gen Z seeks financial independence, fintech companies are creating new banking-alternative solutions to meet the young generation's tech-based needs. The neobanking platforms are app-based and allow users greater access to their financial services with fewer limitations.

Insight - Traditional banking services no longer resonate as strongly for the younger generations as they once did with Millennials, Gen X, and Baby Boomers. Known as the tech natives, Gen Z consumers have grown up with instant access to information and seek the same level of convenience to manage their finances. Therefore, neobanks are creating intuitive apps for instantaneous banking experiences in response to Gen Z habits.

Trend - Aware that consumers are often stressed for money—and this is especially true during the COVID-19 pandemic which has left many without a job and forced small businesses to permanently close—financial companies are emphasizing the need for wellness and mental health practices in their industry.

Insight - Due to the COVID-19 pandemic and the associated government-imposed health and safety measures, many individuals are experiencing exasperated financial stress. In order to alleviate their anxiety, consumers are looking for advice and tools that will help them in their unique situations. In being more organized, individuals feel better prepared and as a result, gain peace of mind when it comes to surviving the pandemic and beyond.

Trend - Millennials are being catered to by new apps aimed at automating and gamifying unappealing but necessary tasks, like finance management or housekeeping. The game-like interface of these apps is critical to their success and resonance with this audience.

Insight - Thanks to their often precarious financial situations, many Millennials today have had to delay adulthood milestones and report feeling overwhelmed by important tasks like money management. This has led this group to be open-minded about the support they receive when it comes to being educated and held accountable when it comes to the management of their daily lives.

Trend - Consumers today are increasingly thoughtful with how they spend, leading many companies--especially those whose products are used infrequently--to offer rental options in lieu of expensive purchase items. Brands that sell products used on an everyday basis, like home decor and casual fashion, are pivoting to offer a rental model as well.

Insight - Today's consumer is accustomed to on-demand products, services and content in many facets of their lives. Considerations these individuals make in their purchase decisions include cost accessibility and flexibility--which rental models offer. These business models benefit consumers who don't have the means or willingness to make investments in products that don't hold up in quality overtime.

Trend - The lack of digital payment infrastructure that extends to small and micro businesses is a significant challenge for businesses operating in primarily cash economies. In an effort to combat this, an increasing number of payment technology providers are establishing merchant-centric benefits ranging from loyalty programs to cost-free implementation processes.

Insight - For today's business owner, establishing secure and effective production, management, and transactional processes are crucial. This consumer is focused on benefits like cost-reduction and security in order to compete in industries that are ever-evolving and expanding with new waves of tech innovations.

Trend - While personal finances were once a taboo subject, today an increasing number of financial services are leveraging the power of social visibility to help consumers meet their financial goals. Whether through group saving apps or comparative investment apps, a variety of solutions are appearing that leverage social visibility as an incentive for saving.

Insight - Today, authenticity is an expectation that consumers have of brands and of themselves in all aspects of their lived experience, including their financial health and wellbeing. The shift towards transparency in this realm signals a shift that speaks to the outdated misconception that many brands hold that for everyone, financial topics are taboo.

Trend - Addressing consumer concerns around security and a need for convenience, financial institutions are rolling out and experimenting with emerging biometric security measures. This more advanced approach to protection speaks to the way in which biometric technology will likely play a growing role in the future of security.

Insight - As technology advances, consumers are becoming more aware of the dangers associated with information breaches and the overall need for privacy. Today's consumer already shares so much digitally, and they are coming to realize the importance of sharing only the information they need to share, creating a new precedent of privacy in general.

Implications - As consumer expectations of products in general are heightened, even the most traditional industries such as banking are debuting innovative offerings to appeal to specific consumer segments. One of the ways this is playing out is in the form of multi-currency bank accounts, allowing consumers to move between countries with ease.

Insight - As the Millennial generation ages into their peak spending years, an increase in globalized citizens can be seen. This generation prioritizes travel as experience and adventure are key motivators for them. Widely, the ability for brands, service providers and retailers to provide frictionless service is reflective of today's consumer base who prioritizes a sense of literal and figurative borderless living.