AN EXECUTIVE BRIEFING

The Fintech Effect 2022
Consumers find hope in fintech amid
economic stressplaid.com

Overview// 2W

ith fintech adoption at 80% in 2022 (up from 58% in 2020), it’s clear that
consumers continue to find value in managing their finances digitally. As

consumers’ expectations and usage patterns evolve, digital finance businesses must

2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS

strive to continually understand and meet their needs.
Plaid’s third annual Fintech Effect report examines trends in US consumers’ usage ofand attitudes about digital finance tools. The report is based on The Harris Poll’s originalresearch, conducted between June and July of 2022, representing 2,000 participants acrossa range of demographics. Some of the report’s key findings include:

1

Fintech offers hope amid economic stress: While over half of consumers (53%) say theirfinancial stress has increased over the past year, 64% say economic factors are making
them more reliant on fintech tools.

2Consumers expect trustworthy, convenient, and secure experiences: The majority ofconsumers want the same things: control over where their data is shared, apps they canaccess instantly, and apps that use identity verification.

3Fintech meets needs based on financial realities: Consumers turn to payment apps (73%adoption) and payroll advance tools (19%) to meet short-term needs. Once those obligations
are met, budgeting (17%) and investing (31%) are the next steps to financial wellness. Users
with budgeting and investment apps tend to be highly engaged with fintech, typically having
more fintech apps and/or checking them more frequently.

Fintech offers hope amid economic stress

Key takeaways• Fintech use remains highas the world reopens

2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS• Economic stress impacts// 3

Fintech offers hope amid economic stressF

intech adoption reached 80% in 2022, a significant jump from 58% in 2020. This
figure is slightly lower than in 2021 (88%), but the dip is likely attributable to Baby

Boomers, whose year-over-year adoption declined from 79% to 54%.

financial priorities andfintech use• Impact remains high as
usage varies

Economic stress is creeping up, with 53% of Americans saying their financial anxiety
has increased in the past year. The top financial concerns consumers cite are day-today challenges: cost of living, gas prices, and recession fears. At the same time, 77% of
consumers agree that accessing their finances from anywhere is helping them navigate
a challenging economy. In addition, 64% of consumers say economic factors are making

95%of Americans say they feel somedegree of financial stressthem more reliant on fintech to manage their money.

For digital finance organizations, this means creating valuable experiences to help
consumers navigate a challenging economy is critical. Fortunately, consumers are clear on
what they expect from digital finance applications.

Consumers expect trust, convenience, and security

Consumers expect trust, convenience, and security

Key takeaways• Building consumer trust
begins with privacy#1. Consumers want to trust their fintech apps
It’s critical for consumers to trust the fintech tools they adopt. Building consumer trust• Time and money savings are2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS// 4

core to providing real value• Consumers want great digital
experiences that are bothconvenient and securemeans promoting:Control: 83% of consumers prefer having direct control over where their data isshared, rather than letting a company decide. As 75% want to connect their bankaccounts to fintech tools, there is an appetite for sharing data, as long as theconsumer dictates where.

Transparency: 76% of consumers have more trust in financial companies when theyclearly share their privacy practices and 82% want to know who is responsible formanaging their data. This further supports that consumers are seeking an active role76%

in how their data is managed.

Engagement: Finally, 76% agree that the more they use digital tools to manage theirof Americans say they
have more trust in

financial companies when
they clearly convey theirprivacy practices

B OTH BA N KS
A N D FIN TEC HS

money, the more they trust them. Thus, creating high-value experiences that bringconsumers back to an app could encourage a positive cycle of increased trust andengagement.

Consumers expect trust, convenience, and security// 5#2. Convenience can make or break sign-ups
Another major concern for consumers is convenience, which can create drop-offs at theonboarding phase. The majority of users (76%) are more likely to sign up for an app they2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS

can access instantly. Plus, 58% of consumers have abandoned an app sign-up process
because it was too complicated. This figure is higher for budgeting (70%) and investment(66%) app users.

How a tool fits into a consumer’s suite matters as well, with 35% saying compatibility has
the greatest impact on choosing a new tool. For digital finance organizations, this means
investing in a smooth onboarding process and integrations with other tools can help
boost sign-ups.

#3. But convenience can’t come at the cost of security
That said, consumers are willing to take security measures to prevent fraud, even if it slows
down their sign-up process. Many consumers (80%) prefer applications that verify theirusers and their identities over apps that don’t. Additionally, 70% of consumers feel safer
using a digital finance product when they need to provide a driver’s license or some
identifying information.

Consumers also shared that convenience and security are the top two factors impacting
their decision to adopt new tools. Finding the balance between a secure experience and aconvenient one is key to attracting new customers.

Fintech meets needs based on financial realities

Key takeaways• Consumers with immediate// 6Fintech meets needs based on financial realities
As consumers grapple with their individual financial challenges, they turn to fintech.

needs turn to payments and2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS

payroll advance tools• Savings and budgeting help
consumers find security in themedium-term• Investing can unlock
long-term benefits

Short-term needs: payment tools and liquidityPayment services are the most commonly used digital finance tool, with 73% of consumers
using them and 46% of consumers keeping a balance in payment apps like Venmo.

Other short-term solutions include payroll advance tools, which 19% of consumers use to
manage liquidity. Surprisingly, these services are more popular with consumers who haveslightly higher incomes: 21% of those making between $50K and $100K and 20% of thosemaking over $100K report using these tools. Meanwhile, only 12% of those making under$50K use these services.

This data suggests two things: payment tools are the largest gateway into fintech andhigher-income consumers aren’t immune to liquidity challenges.

Medium-term needs: Saving and budgeting
About a third of respondents are concerned about saving, but higher-income consumers
are more likely to name it a priority. Thirty percent of those making under $50K consider
savings a priority, compared to 39% of those making $50–100K and 41% of those making
over $100K. This demonstrates that shorter-term needs can impede consumers’ ability toadopt healthy financial habits, even when they know how important they are.

Fintech meets needs based on financial realities// 7

When compared to payment services adoption, budgeting has much lower usage, at 17%.
But consumers who use budgeting tools are highly engaged: with 64% of them using digitalfinance apps daily. These users also have an average of 5.65 finance apps, more than any

2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS

other use case.

This suggests that budgeters are more likely to be highly engaged with managing theirfinances digitally, or are at least more willing to try new digital finance apps.

Long-term needs: Investing
Finally, 31% of consumers reportedly have investing apps and 53% of those users did notinvest before using apps to do so. These consumers also appear highly engaged, with 61%of them checking their apps daily and another 31% checking weekly. Additionally, over halfof investment app users (58%) cite setting aside more for investments as their number one
financial goal for 2022.

Investment apps seem to be lowering the barrier to investing for many consumers andfostering more engaged fintech users.

As consumers adopt more medium- and long-term financial habits, they become moreengaged with their finances. But to reach this point, consumers first have to move throughthe hurdles of shorter-term needs, which limit their ability to focus on building wealth.

Fintech meets needs based on financial realities// 8Fintech use cases on the rise for American consumers
2022

2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS(V EN M O, PAYPA L WA LLET,ZELLE, A PPLE PAY, ETC.)
Payment services

73%
70%
57%

Pay my bills through my bank website

53%
53%
56%

Programs to file my taxes

43%
41%
40%

Online-only banking services

34%
29%
30%

Investment tools

31%
31%
25%

Payroll advance services / early wage access

19%
16%
12%

Budgeting tools

17%
17%
17%

Lending services

16%
14%
10%

2021

2020

Conclusion// 9F

intech offers continued value to consumers, especially as they navigate a difficult
economy. As such, consumers are increasingly clear on what they want from theirdigital finance tools: trust, security, and convenience. Digital finance organizations can2022 | THE FIN TECH EFFEC T: CO NSU M ERS FIN D H O PE IN FIN TECH A MID ECO N O MIC STRESS

better deliver value to consumers by designing experiences around these pillars.

Additionally, fintech has an opportunity to help consumers move towards financial wellness
by helping them tackle their financial realities. One of the biggest challenges for consumers
is moving past their short-term needs. Without this, consumers are effectively unable towork towards longer-term needs with budgeting and investing. Those who do use fintech tobudget and invest are highly engaged. Thus, helping consumers move beyond their day-today needs can not only help increase fintech adoption but also promote overall
financial wellness.

Learn more about helping consumers connect financial applications on plaid.com.

Plaid powers the digital financesolutions that enable millions ofpeople to live healthier financial lives.
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