The Covid-19 pandemic has provided a major boost for the fintech sector, with more financial decision makers now using start-up tech companies as part of their every day lives, according to research by McKinsey.
The global consultancy group polled US consumers on a monthly basis between March and November last year to assess their use of fintechs such as challenger banks, payment firms, investment companies, and lenders.
More than 24% reported using a fintech banking platform, McKinsey found, while 6% of total consumers said they opened a new banking fintech account during the crisis.
Investment and lending platforms also experienced significant growth, the report stated, despite having smaller numbers of total customers.
The research also challenged the notion that mobile or online banking platforms were exclusively for younger people. While Generation Z (18-23 years old) and millennial (24-39) customers had the most fintech accounts, more than a quarter of baby boomers (aged 56-74) said they relied on a fintech account.
However, McKinsey’s report also highlighted that, while the pandemic had increased fintech platform usage, very few of these new users had never used such a platform before.
“It appears that the pandemic has swayed very few non-fintech-users to change course,” the consultancy’s report stated. “The convenience of being able to transact at a distance has failed to motivate them to consider opening fintech accounts.”
Of those that did not have a digital account before the pandemic, just 7% said the crisis had made them more likely to open an account in the future. In contrast, more than half of existing fintech users that had opened an account during the crisis said their experience had made them more likely to rely on fintechs in the future.
Meanwhile, McKinsey also reported greater fintech satisfaction from black financial decision makers than from white decision makers (the only two demographics with sufficient data).
“Black financial decisions makers are six percentage points more likely to report being very satisfied with their fintech accounts than with traditional banking channels,” the consultancy said.