Examining current, future fintech trends

This is part of a series on trends in the banking and ATM industry in 2021 and 2022. Click here for the first story on ATM trends.

To say fintech has exploded in recent years would be an understatement. Customers have increasingly turned to fintechs as an alternative or companion to traditional banking, and COVID-19 only increased that trend.

However, traditional financial institutions and fintechs are not always enemies necessarily. Many institutions on both sides of the divide are seeing the benefit of partnering together to reach new clients and sustain older ones with customized banking experiences.

One way this partnership is materialized is through fintech-as-a-service. Banks can access and offer fintech's solutions as a service to their customers.

Keeping all of these trends in mind, we have to ask a question: "Where is fintech now and where is it going in 2022?" To answer these questions, ATM Marketplace spoke with Brion Bonkowski, CEO and Founder at Tern, a fintech-as-a-service company to get his perspective on fintechs.

Q. How has fintech advanced in 2021 in your opinion?

A. With the rise of DeFi, multiple major U.S. banks, traditional processors and networks are finally putting together strategies on how to fold in DeFi technologies into traditional banking applications.

Q. Where do you see it going in 2022, specifically in the area of customer customization of banking experiences?

A.Affinity banks targeting specific populations as neobanks or otherwise, have a tremendous opportunity to disrupt and continue to take customers away from the top 10 banks with significant marketing budgets focused on specific geographies, socio-economic backgrounds, and/or occupation.

Q.Do you see fintechs and banks as inherently rivals or partners?

A. Definitely partners. I think banks are changing the way they view risk in their portfolios and are opening up to the possibility of fintechs innovating on top of their stacks of traditional bank products. Every bank I speak with is seeking incremental ways to increase their non-interest bearing portfolio, and that usually comes in the way of transactional revenue. Fintechs help banks drive that portion of their business, in turn, making the banks more valuable.

Q. Can you talk a little bit about fintech-as-a-service?

A. The "as-a-service" moniker has been a trend for as long as I can remember. But it really kicked off with the rise of Salesforce, which has become a centralized hub for business applications. I see fintech-as-a-service as an enablement platform for startups looking to disrupt current legacy players or enterprises, looking to add new products or increase ARPU across their portfolios. At Tern, our directive is to help the world's fintechs grow with easy-to-access tools containing multiple deployment options. Fintechs are constantly changing and adding services, and we want to be a trusted partner to help with this evolution.