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To better understand the effect of consumers’ financial attitudes on the fintech industry, Blumberg Capital conducted a survey of 3,000 U.S. consumers and gathered insights from Blumberg Capital’s CIO Council, a group of advisors consisting of CIOs, CISOs, and IT decision makers.
Consumer Financial Anxiety on the Rise
60% of consumers reported being more anxious about their financial well-being than they have been in the past three years, as of September 2023. Yet, only 33% have emergency funds for six months and 21% have enough for three months. This results in a more cautious approach to spending, with major milestones like starting a family, buying a home or saving for retirement taking a back seat to planning for more immediate financial needs.
Consumer Needs Spark Fintech Opportunities
With consumers reevaluating how and where they manage their finances, concerns around making the “right” decisions are bound to arise. A majority of respondents (57%) stated they’re fairly confident that they know how to manage and grow their finances, but acknowledged that extra support would be welcomed. The need for additional guidance in making financial decisions presents an opportunity for fintech startups. When consumers have confidence in their financial fitness, even in the face of a turbulent economy, the positive effects can extend beyond the individual. Fintech startups must first understand the needs of users and those can vary by industry and financial standing.
“Core to any fintech solution is that the end customer’s needs must figure centrally into product development,” said Jarred Kessler, founder and CEO of EasyKnock, a Blumberg Capital portfolio company. “Today, consumers are looking for faster, cheaper, more transparent, more inclusive solutions.”
“Customers need to be met where they are – EasyKnock created a solution for consumers to sell their home, convert their equity, and rent it back with the option to repurchase. Solutions we’ve built for our enterprise partners deliver on our core objective of providing financial flexibility and control our customers need to achieve their goals,” said Kessler.
Fintech Growth Can Align with Consumer Financial Habits
The fintech industry isn’t immune to the changing financial habits of consumers. Instead, its growth may be directly tied to them, especially if they can empower customers to guide consumers toward reaching their financial preparedness goals.
For more data and insights on adoption and attitudes toward fintech, check out the first post in Blumberg Capital’s Fintech Friday series on why trust is foundational in fintech here.