Fintech trends cannot hide from inflation

If it is a word, no conversation seems to be without in current times its inflation. The stresses endured by rising inflation affect every corner of the economy, from consumer goods to employment, and the results of the fintech industry underscore all the consequences of these drastic changes. Joanna England of Fintech Magazine highlights the impact of inflationary pressures on fintech trends and the fintech community:

“Neil Kadagathur, co-founder and CEO of UK fintech lender Credit Spring, believes the cost of living crisis has led to increased scrutiny of financial services companies by the regulator to ensure consumers are treated fairly and protected.”

The changes in the industry that Kadagathur further describes are actually positive in the long term to ensure that consumers are well informed about the actions taken by companies they trust in financial services. England adds several comments from Kadagathur:

“He says an increased focus on the impact on customers should be welcomed by the industry. “The financial sector has a duty to protect customers, especially in the current economic landscape. For example, lenders have long had a bad reputation among borrowers – four in ten (43%) believe lenders encourage them to take out more money than they can afford, and fewer than one in five (17%) see lenders as responsible businesses that care about their financial well-being.’ A result of this, as he points out, is that more responsible and ethical business models are emerging in the industry to meet the demands of borrowers and ensure they are protected.”

Trust in fintech providers is essential for the industry to continue to accelerate through the downturn and build long-term and meaningful relationships with its customers. My colleague Brian Riley recently provided research to warn of the pending effects of inflation on consumer budgeting. He points out that personal savings, which currently stand at 5.4% of disposable income, are at risk as personal expenses rise and consumers have no additional income options to use when paying for necessary expenses. While we believe that credit card spending will increase in the near term, there is opportunity for a number of fintech firms to create better programming to diversify the way individuals maintain their budgets and work through the personal implications of the inflationary economy. .

As a preview of upcoming research I have in the prepaid space, there is the opportunity for both current and emerging fintech players to use prepaid instruments as a beneficial tool in shaping consumer budgets, working within family units, and effecting change in the market that endures. that inflation affects consumers.

Overview after Jordan Hirschfielddirector of prepaid advisory services at Mercator Advisory Group.