The top 10 consumer driven trends in finance and payments

21 November 2023 Consultancy.asia 8 min. read
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The future of finance and payments in the Asia Pacific (APAC) region is being shaped by a range of major consumer trends, including digital banking, sustainability, financial inclusion, and changing spending appetite due to economic uncertainty. A new report from Dentsu sheds lights on the most important consumer-driven trends in finance and payments – the spotlight on the top 10 trends.

Financial wellness

Consumers are beginning to see financial wellness as just one more element that contributes to overall health. Consumers seeking financial empowerment and control will look for support from new and dispersed sources of influence.

As the cost of living issue emphasises the connection between sound finances and happiness, consumers and companies should anticipate that financial wellbeing and financial literacy will become key priorities in the future.

The top 10 consumer driven trends in finance and payments

The Covid-19 pandemic highlighted the link between healthy finances and a stress-free life. During that time many consumers felt their finances deteriorate and the link between financial and mental health became clearer than ever. This is evidenced by the fact that 76% of global consumers who felt their mental health got a lot worse during the pandemic, also worried about their finances at that time.

In the coming years, financial wellbeing is projected to become increasingly synonymous with general wellbeing as the link between healthy finances and a happy, healthy life is further underscored by the cost of living concerns.

Banking goes green

In the years to come, climate change will remain the dominant global threat, with 63% of APAC consumers feeling personally at risk of its effects over the next five years. This is prompting consumers to adopt sustainability initiatives that are transforming their relationship with the products and services they interact with on a daily basis.

The top 10 consumer driven trends in finance and payments

These values-based consumer behaviors have entered banking, with sustainable credit cards, impact investing, and ESG strategies becoming increasingly commonplace. Consumer interest is beginning to spread, as evidenced by the 65% of customers in APAC who would use an app to track their personal environmental effect.

As consumers place more and more trust in their banks to help them in their journey towards sustainable living, we will see an influx of banks claiming to be green. As the amount of scepticism around ’green washing’ increases, banks will need to be explicit about how their ESG initiatives work, responding to greater demands for transparency including proof of impact.

Inclusive banking

Companies in all industries, including banking and finance, will be under increasing pressure to not only represent but also actively serve and empower an ever-widening range of customers, communities, and requirements as consumer demands change from passive inclusivity to active empowerment.

The top 10 consumer driven trends in finance and payments

Financial service providers will be able to more meaningfully connect with the values and experiences of their consumers by focusing on particular groups; otherwise, their general pledges of inclusivity would seem insufficient. As companies work to assist customers from all backgrounds in creating a more financially secure future, financial inclusion should become a common goal within the banking and finance sector in the future.

Humanised banking

Demand for genuine, personal, and sympathetic brand interactions across all platforms increased in 2020 as a revolt against the trend of increasingly automated financial services brought on by the pandemic. To be more consistent with customer experiences across offline and online channels, financial firms are expected to provide human service channels and integrate more humanised offers into digital or automated services.

The top 10 consumer driven trends in finance and payments

In 2022, 57% of APAC consumers used a chat messenger service to speak to a customer service assistant at least monthly. While such findings don’t diminish the importance of face-to-face, human interactions for a significant proportion of consumers, they point to the rising preference and expectation of more virtual engagement with financial brands in the 2020s.

Purposeful rewards

Rewarding consumers for adopting behaviors that promote some form of social good or benefit will be a key feature of B2C loyalty programs. In particular, rewards will be aimed at nudging more eco-friendly and healthy habits.

The top 10 consumer driven trends in finance and payments

Moreover, the finance, banking and insurance sector is optimally placed to capitalise on this trend due to the sector's ability to access spending data to monitor and reward such behaviours.

New payment frontiers

Driven by the increased digitisation of payment technologies, the Covid-19 pandemic, and the growing need for convenience in point-of-sale (POS) systems, consumers are making use of more digital payment methods, which are slowly becoming the default.

The top 10 consumer driven trends in finance and payments

In the coming years, digital technologies will allow consumers to use a range of payment methods, from e-wallets to crypto currencies, further increasing expectations and making POS systems more efficient and convenient than ever.

The investment revolution

When and how people invest is about to undergo a change thanks to the rise of trading apps and the increasing complexity of artificial intelligence. While consumers turn to shorter-term financial planning due to concerns about the expense of living, this trend will pick up steam later in the decade as a result of their desire to maximise savings and develop long-term resilience.

Chart: The Investment Revolution Expected Trend Trajectory in the 2020s (pg 34)

The credit makeover

The emergence of trading apps and the growing sophistication of AI is set to revolutionise and democratise when and how consumers invest.

The top 10 consumer driven trends in finance and payments

While the current cost of living concerns will dampen the pace of this trend, as consumers look to shorter-term financial planning, the desire to build long-term resilience and maximise savings will see this trend fully energised later in the decade.

Buy Now, Pay Later

Though consumers have traditionally relied on credit cards to avoid paying the full price of products upfront, the rise of ‘Buy Now, Pay Later’ (BNPL) options has empowered consumers with cheaper and more flexible credit options than ever. In the 2020s, BNPL is set to become an increasingly popular way to pay for products and services.

The top 10 consumer driven trends in finance and payments

Though as economic uncertainty continues and awareness of the importance of financial wellbeing grows, consumers will also likely look for ways to reduce the amount of credit they take on also raising calls for more ethical financing alternatives.

Branches reinvented

As more and more activities in life move online, financial service providers will keep improving both the online and offline customer experience in order to better serve their clients.

The top 10 consumer driven trends in finance and payments

In an effort to optimise their branch network, more banks will close low-traffic retail locations. They will also continue to innovate in order to make sure that their online spaces and systems operate seamlessly and complement their offline offerings.

In the future, financial services will not only enter new virtual realms but also rethink the function of the typical bank branch by using pop-up and multi-use venues to offer clients more than just financial support.