Key Takeaways
- Major financial technology companies are offering products that compete with banks and credit unions
- These products include checking accounts, debit cards, savings tools, and innovative tools like cryptocurrency trading
- Banks and Credit Unions should start offering crypto to gain back business from those leaving for these fintechs
Many popular financial technology companies (fintechs) are offering new crypto trading tools to their users alongside traditional banking products, giving users less reasons to choose their bank or credit union as their top-of-wallet option for spending, investing, and saving. In this blog, we’ll take a look at three major players in the fintech market that you are likely losing your user's business to, and one way you can start bringing valuable users and assets back to your institution. As many institutions continue to struggle building relationships with younger demographics, evaluating what these fintechs are doing is critical to your business’ success.
1- PayPal
PayPal is by far one of the largest and most utilized financial technology companies in the world, period. As a leader in the online payments industry since its founding in 1998, the company has built a suite of products including commercial payment processing, loan services, and invoicing to consumer savings, bill pay, credit tools, and much more, all into what many refer to as a 'super app' that has features that compete across the financial industry. The company recently introduced tools for users to buy and sell cryptocurrency alongside regular funds, clearly signaling that they believe that the market is hungry for digital wallets.
2 - Venmo
While Venmo is owned by PayPal, they cater towards a younger consumer audience directly with their mobile app and simple peer-to-peer interface alongside traditional banking products. With 70 million users, $230 billion in total payment volume in 2021 alone, and 2 million merchants accepting Venmo as payment, it is a force in the market that financial institutions should be aware of. Venmo introduced crypto in April of 2021 and by October of the same year they already were a top-three crypto wallet worldwide among those with payment features, according to Crone Consulting.
3- Plaid
While they do not offer a direct-to-consumer app, Plaid is a fintech that connects bank accounts and other apps together, including a number of apps that have crypto offerings. The company website boasts that they work with over 7,000 fintech partners, enabling features to withdraw money from bank accounts to fund things like crypto accounts. Needless to say, they’re one of the many companies responsible for taking users from financial institutions to third-party services, where they are treated with crypto investing tools alongside traditional bank offerings, giving them less reasons to return.
Some financial institutions have responded to these threats by blocking withdrawals to them or imposing additional fees. However, this can just frustrate users further because they cannot do what they want with their assets. Instead of taking actions to limit users to keep them around that could backfire, why not give them access to more tools in-house, in an environment they can trust at their own institution?
How to fix these issues & get back to top-of-wallet
While there’s no single solution to win back users, there are a few big steps your institution can take. By evaluating where your user’s funds are going, for example, and seeing the outflow to fintechs offering crypto, you could consider implementing a cohesive digital asset strategy that lets users engage with your financial institution in new ways. CryptoFi seamlessly integrates into your digital banking platform alongside existing user accounts and enables crypto buy/sell/hold capabilities, a rewards program, education services, balance-transfer from competing exchanges, and more. Whether your institution is looking to provide more financial opportunities to users or you want to keep an edge over your fintech competitors, CryptoFi can help your users learn more about crypto and invest in an environment they can trust; their own institution. Send us a message and we'll work with you to integrate a solution that makes sense for your institution's needs.
