Key Finance and Fintech Digital Trends for 2024 

Driven by emerging technologies, evolving regulations and shifting user expectations, finance and fintech companies live at the intersection of innovating for customer engagement and safeguarding user data. The ongoing challenge to attaining and retaining satisfied customers in a digital-first economy is providing end users and merchant partners with near-instantaneous time to money (how quickly funds move from one place to another and become accessible to the receiving party), flexibility of payment choice and control of financial-data sharing, without sacrificing security.

Our 2024 State of Digital Quality reports surface insights from platform and survey data. They incorporate perspectives from Applause that regularly work with global organizations to optimize digital quality and accelerate releases. For the third consecutive year, we’ve released a family of reports that help organizations navigate the ever-changing digital landscape. 

For this blog, I interviewed members of our client delivery teams and finance subject matter experts to gain perspective as a complement to the overall findings in our primary State of Digital Quality report and to existing published vertical data. To access the main report and related resources, please visit our SDQ 2024 microsite. 

Finance trends

Our global finance client teams work with a wide variety of finance and fintech customers around the world. This year, in our ongoing crowdtesting partnerships in this sector, our teams see four main projects and priorities: 

• Fraud detection and management
• Transfers
• Open banking
• Personalization

Fraud detection and management

The Know Your Customer (KYC) process is top of mind for people in the finance and fintech spaces. Though not new this year, KYC is foundational to mitigating fraud. KYC refers to guidelines that financial institutions and businesses use to verify the identity, suitability and risks of a current or potential customer. This process hopes to find suspicious activity before it comes to fruition. 

Chris Doucet, senior solutions engineer, Applause says “Firms need KYC/onboarding assistance. This involves sourcing and project managing real people to execute a combination of customer journey, functional and UX testing to identify issues that occur during specific customer flows. Testers provide a diverse range of personal identity documents (passports, driver’s licenses across countries/states/provinces, national identity cards, etc.) in different formats and proof-of-address documents (bank statements, credit card statements, utility bills) from different companies. This is often hard for finance and fintech organizations to do on their own.” 

The challenge lies in finance and fintech organizations’ lack of presence in all of their markets. They would need employees, friends and family in all supported markets to gain proper coverage to test KYC. An added impediment to this challenge is that KYC is meant to be a one-time process for a user, so after a person tests KYC once, they can’t test again, since they’ve already been verified and created an account.

Applause global account teams are also beginning to see name verification in their work. This is where a marketplace, Amazon for example, enables an individual to sell a product, then it takes its fee. When the product is sold, the seller offers up credit card information for the bank as part of the name verification process, into which Amazon will pay. Amazon takes that personal banking information and sends it to the card issuer to verify the individual’s information. Here, as in the case of KYC and onboarding, there is a need to test the process with real sellers. Crowdtesting provides the most viable solution.

Global financial services company requires new-to-bank customers for testing

One of Applause’s global financial services clients offers a wide variety of services including: financial transaction processing, commercial banking, consumer and community banking, wealth and asset management, and investment banking.

The company needed assistance in testing the user experience of new-to-bank customers, as new product offers were not always added to customer accounts at the time of redemption. Further, it required videos from these customers while they experienced the issue to understand how to properly fix the defect. The financial firm could not get the data it required from its internal testing team because the issue only affected new account holders, and internal testers already had accounts. 

Applause testers provided — and still provide on an ongoing basis — videos and data points so the firm can fix issues. Critical issues have been uncovered, for example, where a new customer is blocked from registering for a new account due to an unclear error message asking for unspecified information. The overall process reduces friction and loss of new customers.

Transfers

Money moves fast and in all directions today. At the core of all transfers is the concept of time to money — how quickly funds move from one place to another and become accessible to the receiving party. Some services charge a fee to receive funds more quickly, much like expedited shipping prices for products purchased online. The list of players in the money-movement game is long and ever-growing, including banks, mobile money services, money transfer operators like Western Union and real-time payment providers.

Applause global client teams are seeing a surge in real-time payment (RTP) options, providing almost instantaneous fund availability, highly regarded in businesses small and large. The 24-hour access to these payment options make them ideal for emergency/urgent transfer scenarios. RTP examples include platforms like Cash App, Venmo, PayPal, Google Pay, Apple Pay and other instant payment rails like the Federal Reserve’s FedNow service, which as of the time of this post, has exceeded over 1,000 financial institutions in its network.

Testing transfers requires sending testers – with specific sender and receiver accounts around the world – through various scenarios, and finding these specific accounts is challenging. Other variants may come into play depending on the testing scenario: a need to test on specific global networks, or a spectrum of mobile and desktop devices with a diverse mix of operating systems. For this reason, it can be very challenging for financial institutions and fintechs to internally test. 

Cross-border payments 

International borders add to the complexity of money movement. These pesky demarcations bring a host of challenges: varying currencies, fluctuations in exchange rates, compliance with specific anti-money laundering (AML) laws and varying local regulations, multiple intermediaries in the transfer process and added fees. These issues can create delays, or worse, terminate a transfer or payment.

If money is transferred across borders, how quickly can you see and access the funds? What fees might be added, and when is the user made aware of them?

“Each country has its own regulations,” says Doucet. “The UK, for example, has now passed fee-transparency regulations requiring businesses to clearly list all transaction fees upfront, so there is no surprise to the user at the end of a given transaction. The implications of this are not purely confined to a single country if a given service supports international parties within their UK marketplace. You can imagine the amount of testing required to get this right.”

Cross-border payment testing in India for a global fintech/financial services provider

A global financial services provider knew that credit and debit cards issued outside India were not being accepted at physical merchant locations within India. It understood that the majority of acquirers (intermediaries between the merchant and card-issuing bank) block international card payments due to perceived concerns around fraud or higher commercial rates involved in processing a cross-border card transaction.

To create the most friction-free experience for its cardholders, particularly tourists to India, the financial services provider wanted a deeper understanding of the overall landscape around declined transactions for travelers to India, but didn’t have the infrastructure, processes or personnel to do in-market testing there.

The provider had a bold goal of testing across many major cities in India. It wanted to know very specific insights around store signage and variations of declined transactions, including when merchants would simply decline to process a transaction. It wanted to test cards issued from a specific number of countries as well.

Applause leveraged its global crowdtesting capabilities and fully managed service, and developed the specific testing plan for the targeted cities around the country.

Applause completed the testing in just 43 days and exceeded the goal of delivering 3,000 in-store transaction attempts. The global team completed 3,304 total store visits and tested 3,121 cards. Applause provided a comprehensive report for the financial services company with thousands of data points and related insights, which gave direct paths of action to remedying issues.

Open banking

Open banking is a financial services model that enables customers to securely share their financial data with third-party providers through APIs. This model is critical to aggregating financial data and enabling direct payments from bank accounts. It promotes competition, enhances digital financial services and improves customer choice. It does this in two ways: 

• Data aggregation: Banks can securely share customer financial data with authorized third parties through APIs. This facilitates financial information aggregation, allowing fintechs and other financial firms to create comprehensive views of customer’s financial landscape by displaying data from multiple banks and accounts. With this, users can access financial management services where all account balances, transactions and spending trends are available in one place. 
• Direct payments from bank accounts: Open banking enables direct payment initiation from a bank account, bypassing traditional card networks. Using APIs, and once authorized by a user, third-party providers can securely initiate payments. This improves payment efficiency, lowers transaction fees and supports innovations like one-click payments, which are convenient for users and beneficial for businesses. The result is reduced transaction costs associated with card payments.

Carlton Retland, principal solutions engineer, Applause notes open banking’s growing momentum in the U.S. “It’s been in Europe for several years and is making its way into the U.S. In user terms, it means you can access a centralized app to see all of your account balances and information across multiple banks and all the bills that must be paid across multiple payees. This is a game-changer, but there’s always a balance between convenience and security, and this complex scenario is one where testing with real users really makes a difference.”

Personalization everywhere

Today, every industry strives to differentiate through personalization. Finance and fintech are no exceptions. As Forbes mentions in its article As Fintech Expands, Opportunities And Challenges Lie Ahead, “An additional trend is the growing use of machine learning and artificial intelligence in fintech. These technologies can make financial services more effective and individualized.” 

But, no matter how much AI you use, how do you make certain your services are actually more effective and individualized? One way is by doing formal UX studies to get close to your customers and understand their motivations. Another less formal approach is to use real people to go through customer journey flows to test what you need.

Large international bank works with Applause to ensure optimal customer experience

Applause works with a large international bank that is revamping its portal and interactive voice response system. It wants to ensure that its users have the same elevated user experience after the improvement efforts. The bank wants to gauge how these customer experiences play out over an extended period of time and wants insights at several predetermined points during that time frame. 

Applause testers signed up for a credit card, immersing themselves in the application, approval and activation processes. While doing this, they also familiarized themselves with the portal and many of its features. Next, they were asked to regularly use the new card and share information around transactions. This information helped ensure transactions were classified in the correct categories, which would then reflect in the proper rewards categories. Applause aggregated all insights from this period into a comprehensive report for the bank.

Banking on quality 

To cash in on customer satisfaction and create lifetime loyalty, finance and fintech organizations must find the balance between convenience and security, whether working directly with customers or merchant partners. 

Applause partners with finance and fintech firms to provide crowdtesting solutions around the clock and around the world. We provide real-users who match the demographics of your customers and help reduce testing complexity and provide real-world insights that can’t be done in house.

Learn more about how we partner with finance and fintech firms to help provide the best digital experiences.