People are “doubling down” on fintech use, the Plaid survey claims

Consumers are doubling down on fintech adoption despite economic uncertainty that raises questions about their use of fintech apps, according to a new study by open banking firm Plaid.

Fintech has surveyed more than 4,000 consumers in the UK and US as part of its annual Fintech Effect report. Eight in 10 consumers (80%) use some form of digital financial tool, down from 88% last year – a decline Plaid attributes to falling adoption among baby boomers, who report lower levels of fintech use this year compared to 2021 But adoption is still significantly higher than in 2020, when 58% of consumers reported using some sort of fintech tool.

Plaid estimates that fintech adoption in the UK has doubled over the past five years, with 84% of UK respondents saying they use fintech tools to manage their money. In 2018, a government report estimated that 42% of consumers had embraced fintech. And in the US, nearly half of Americans (48%) use fintech to manage their finances on a daily basis, a number that has grown steadily over the past three editions of Plaid’s survey.

As consumers face high inflation, rising interest rates and uncertain markets, there is a growing sense that fintech will play a central role in helping consumers manage their financial situations. Over half of Americans (53%) and more than six in ten Britons (62%) say their financial stress has increased in the past year. A similar proportion (61%) of respondents believe that digital financial tools will help them cope with financial challenges, putting the onus on developers to incorporate more money management tools into their apps.

Users trust fintech to ‘navigate inflationary times’

A Plaid spokesperson writes in the report: “After covid shutdowns pushed fintech adoption to near-ubiquity by 2021, economic reopenings in the US and UK raised questions about sticky digital acceleration – would people go back to their old ways, or have digital habits become the new normal?

“This year’s survey shows that in finance, consumers’ digital habits have largely remained the same. Trends over the past three years show that fintech’s positive everyday effect has led to sustained consumer appetite for technology-driven financial innovation.

“Inflation has eroded financial confidence, but consumers say fintech is helping them weather the economic storm. Beyond accessing their finances from anywhere, consumers are seeking stability from payments and liquidity management applications, and using savings tools to meet short-term and long-term goals. As financial markets faced with volatility, consumers across the income spectrum are turning to their investment apps to stay on top of their holdings and navigate inflationary times.”