June 2, 2017

It’s that time again – Mary Meeker just presented her Internet Trends 2017 report at Code Conference. I have summarized below the trends that touch fintech, but you can read through the 355(!) slide deck here if you want. (the slide deck has seen massive growth over the years… from 66 slides in 2011, to 196 in 2015, and 355 this year). If you don’t want to read through the slides you can watch her presentation here.

In my review last year, the top themes were physical retailers becoming digital, the proliferation of B2C messaging apps, voice computing interfaces, and data as a platform/data privacy. While these trends are still continuing to grow, this year’s report has a few new focus areas.

Transparency and Engagement

Slide 56: SoFi is used as an example here. The second most visited page (after the home page) on SoFi’s website is the “How It Works” page, where SoFi explains that their secret is efficiency – through being digital, selective, and innovative (buzzwords!). Instead of a generic contact email, the member dashboard prompts you to send “feedback direct to the CEO” (no word on how he finds time to read thousands of emails…).

Gamification
Slide 128: Acorns is used as an example of the gamification of every part of life, including health, personal finance, education, advertising, etc. The Acorns app/account merges automated savings with automated investing by linking to your credit or debit card and sending the “round-up” amount into your Acorns investment account. Acorns uses a few methods to get consumers engaged, such as the tracking of your investments, referral bonuses from signing up friends, and rewards from marketing partners.

China China China
Slides 218-223: Mobile payments in China have gone from almost nothing in 2012, to $1.2 trillion in 2014, and $5+ trillion in 2016.  This is even more impressive when you note that nearly 80% of all transactions are for less than $15 – Chinese mobile payments (led by WeChat and AliPay) are excelling in micropayments ($0.01, $0.15, etc.). The scale is incredible, with 600 million monthly active users on WeChat Pay, 300 million users of Yu’e Bao Wealth Management, and 380 million users of Ant Insurance Services.

India India India
Slides 256-264: India has seen explosive growth in banking and payments, in part due to the digital identity Aadhaar system that the government rolled out and forced demonetization. Through a combination of biometric digital identities and electronic KYC, opening bank accounts for previously unbanked citizens has become possible, resulting in some 280 million bank accounts opened in 3 years. While there was some digital payments growth in the past due to the Universal Payments Interface, it didn’t really get going until demonetization occurred last November. Since then, digital payments volume has ballooned from $15MM/month to $359MM/month four months later.

As with the broad themes from last year, I expect these four trends to continue to shape the way the financial services industry operates around the world. For US-based banks and fintech startups, starting with transparency and engagement will probably be the most powerful trend for a differentiated offering.