In the financial services industry, FinTech is the combination of mobile apps, processes, products and business models provided online, comprised of complementary financial services. The apps, in particular, have become very popular in order for more consumers to do exactly what their behaviors are leading them to do naturally: complete electronic transactions.

About 12 years ago, some of the first FinTech startups were founded to respond to the challenge of making financial systems more accessible and efficient. FinTech apps include that for financial education, retail banking and lending, peer-to-peer money transfer, investment, cryptocurrency and others.

Do we have a consumer confidence picture?

So is there data yet in these early years to suggest whether consumer confidence is there? Possibly.

According to a Juniper Research report, there will be more than 2 billion mobile banking app users by 2020. That number will grow exponentially as reliance on mobile tech continues to advance.

According to Wilson Kerr, vice president of business development and sales at Unbound Commerce, “Apps can harness trusted phone features like Apple Pay to reduce checkout friction. [They] can tap into loyalty programs and reward customers for patronage ... Banking apps drive deep engagement and deliver real value, which is why so many consumers love them.”

The reality that there is such a rise of banking apps shows that consumers are becoming increasingly comfortable using their mobile devices for storing financial data and making purchases with them. So retailers can feel buoyed to target consumers for their own e-commerce solutions.

“Smart retailers will look to the meteoric rise of banking apps as a signal that they should begin the process of asking themselves how an app could help them solve a problem for their customers, while adding retail sales to their bottom line,” Kerr said. “For example, apps can allow a furniture retailer to offer virtual show rooms and the ability to place images of furniture for sale into homes.”

How the great recession of 2008 may have helped: the millennial factor

There remains a lack of confidence, a “lingering distrust in [traditional] banks,” since the financial crisis of 2008. As a result, FinTech startups have flourished in the wake of what most industries see as dark days to put behind them. And it’s millennials (the largest consumer bloc at the moment) who were growing into adulthood and influenced emotionally during the crisis.

“What that underscored for people is that banks can’t be trusted, and your money is only as safe as the government allows you to believe,” said Fundstrat founder and managing partner Tom Lee [3], who worked at J.P. Morgan in 2008. “That’s why millennials today have so little trust in banks, because of what their parents went through.”

“The younger generation will gravitate toward brands that provide the best user experience, the best value, and ultimately, can help them reach their financial goals,” said JMP Securities’ Devin Ryan.