New report examines FinTech issuer performance

Money mobility has become a top priority for consumers as they continue their journey into a more connected economy. Beyond the frictionless movement of funds from accounts, mobility has now come to include instant access to deposits made with common payment options such as cash, check, real-time payments and credit cards. For FinTech issuers working on consumer-facing products hoping to steal share from traditional banks, this capability has quickly gone from a “nice-to-have” tool to a must-have offering. However, consumer confidence in sector fintechs to offer services on par with traditional financial institutions (FIs) is equally necessary.

PYMNTS has found that FinTech issuers generally have some catching up to do. Especially those who are considered to have worse results have a long way to go before they can fully compete with their more established competitors. For the ongoing “Money Mobility” collaboration with Ingo Money, PYMNTS has focused on tracking FinTechs working on consumer-facing payment products or services, as well as finance and financial operations generating revenues of $5 million or more annually. Within these parameters, the Money Mobility Index was calculated using metrics that contributed to customer satisfaction. A higher index score represents a greater chance of an issuer gaining new customers and providing them with the money mobility tools they seek. Analyzing both money-in and money-out transaction functions, PYMNTS found that the typical FinTech account issuer scores an average index rating of 53.5 out of 100. The 30 issuers with the lowest index scores averaged just 35.6 as an index score.

The latest in this series, the “2023 Money Mobility Index,” finds that these bottom users lag far behind their higher-performing peers when it comes to cash-out security.

More than three-quarters of these FinTech issuers say their customers have issues with payment security. Among managers, only a third report these difficulties. Such a wide gap when it comes to safety satisfaction from the competitors in the better performing sector will be worrying at any time. But in today’s digital banking world, consumers value security over convenience, meaning this inadequacy could trigger a customer exodus in search of issuers that offer better data protection.

In an interview with PYMNTS’ Karen Webster, Ingo Money CEO Drew Edwards explains how part of the problem may lie in the piecemeal strategy some FinTech issuers are taking. “They’re stitching things together, one partner at a time, one supplier at a time, and I think it’s a mistake because of fraud. If you can’t see the whole picture, then it’s hard to control the bad actors. It’s really hard to offer good customer experiences and control risk at the same time.”

The ray of hope for these bottom performers looking to catch up may be that with some focused effort, there may be room for improvement. But without such attempts, it can only be a matter of time before customers move on to safer pastures.