FinTechs Focus on Innovation and Gen Z to Drive Future Growth

"The FinTech Innovation Agenda," a collaborative report by PYMNTS Intelligence and Velera, sheds light on the evolving strategies of financial technology firms (FinTechs) to enhance product offerings and expand market presence. Key objectives for FinTechs include the development of new products, aimed at bolstering brand reputation and reaching broader consumer bases. This includes extensive investments in mobile features and user experience enhancements, keeping current clients and drawing in new ones. Notably, while 62% of FinTechs prioritize attracting Generation Z consumers, a demographic known for its digital-first preferences, some firms remain cautious about targeting this segment, despite its potential growth opportunities into the next decade.

Based on a study of 101 FinTech CEOs who provide services to commercial banks, credit unions (CUs), and individual customers, the report underscores FinTechs' commitment to innovation. It reveals that many firms test new products internally, significantly more than with external consumers, highlighting their cautious approach amidst regulatory challenges and technical complexities. Despite these hurdles, FinTechs are steadfast in their pursuit of innovation, viewing it as pivotal to customer retention and acquisition strategies over the next three to six years.

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