The Fintech Effect: Fintech’s Mass Adoption Moment

An analysis of Fintech’s mass adoption moment and Plaid’s Annual Research Report.

Plaid, a fintech that helps people connect their bank accounts to the services they want to use, and which powers thousands of the most widely used fintech apps, recently released their second annual FinTech report.

I spend a lot of time working with fintechs, following industry trends, and attempting to understand “where the puck is headed”. Needless to say, this report – and the data contained it – are important for my understanding of fintech markets.

After having spent four immersive days at Money 20/20, I wrote that one of my key takeaways was that the industry will move beyond distribution and marketing to reimagine its core offerings, and embedded finance is still in early stages of development.

Plaid’s research supports this hypothesis.

Here are my key learnings – and executive summary – from their 41 page report.

Executive Summary

Over the past year people shifted from exploring fintech to incorporating fintech into their everyday lives. Seven in ten consumers say they have a routine around using technology to manage their money (68%), including three-quarters of millennials (76%). Sometimes called “contextual finance,” or “embedded finance,” the concept of seamlessly fitting financial services into everyday life isn’t entirely new. But only in the past year has it become a reality for more consumers.

As fintech expands financial services beyond the bank account, trust becomes increasingly critical.

And as embedded finance becomes more prevalent, with non-financial companies incorporating financial services into digital offerings, they’ll need to balance control and automation to ensure consumers remain in the drivers’ seat.

The mass adoption of fintech represents a significant shift in consumer behavior – changing how, when and where people interact with their financial information and their money.

  • People gravitate to ease and convenience – people want apps and services that make managing money easier, and they want them to work when and how they want.
  • People expect interoperability – people are using multiple apps and services to manage their financial lives and they expect those apps and services to provide connected experiences, regardless of whether they come from different providers.
  • People expect more value – with more options and lower barriers to adoption, people expect the services they use to help them save time and money, but also achieve better financial outcomes through insights and automation.
  • Impact and trust scales with use – perhaps what cements fintech in people’s lives more than anything else is that the more they use it, the more benefits they experience and the more they trust using technology to manage their money.

Context: Learnings and Outcomes

Overall, consumers told Plaid’s research team three things:

  1. Fintech’s value will keep people digital-first after the pandemic
  2. Fintech makes finance more inclusive and social
  3. Fintech integrates finance into people’s everyday lives

In short, Fintech has reached mass adoption.

Between 2020 and 2021, the proportion of U.S. consumers using fintech grew from 58% to 88% – a 52% year-over-year increase. Similar adoption leaps took the refrigerator twenty years, the computer ten and the smartphone five.

In terms of consumer technology penetration, fintech has entered the stratosphere of video streaming subscriptions (78%), and social media (72%) and is nearing par with the internet (93%).

As fintech adoption approaches parity with traditional banking, fintech apps and services are becoming the primary way most people manage their money.

Fintech’s move to the center is happening at both an ecosystem and an individual level.

Plaid’s Key Findings

Fintech’s value drives a permanent shift to digital.

Across all use cases, between 80-90% of fintech users plan to keep using fintech beyond the pandemic. The majority of users report that fintech saves them time (93%) and money (78%), and reduces financial fear and stress (71%).

  • Fintech’s pandemic acceleration has staying power
  • Fintech improves people’s financial well-being
  • People use fintech to address both financial goals and challenges
Fintech makes finance more inclusive and social.

Fintech use surpassed traditional banking among Hispanic people in the U.S. (95% use fintech). Seven in ten (71%) U.S. consumers say fintech has made finance part of daily conversation.

  • Fintech helps underserved groups solve their biggest financial challenges
  • Fintech breaks the taboo of talking about money
  • Bookend generations see similar impact, but seek services in different places
Fintech integrates finance into people’s everyday lives.

Eight in ten fintech users say fintech seamlessly integrates into their everyday lives (77%). Nearly half of Americans use fintech every day (48%). Gen Z trusts fintech (66%) with their financial information more than traditional financial institutions (63%).

  • Fintech helps make finance a seamless part of everyday life
  • Fintech delivers both control and automation
  • Fintech’s trust gap with traditional finance is narrowing


The vast majority of people say their digital financial habits won’t go back to the way they were before Covid-19. Across all use cases, between 80% and 90% of those who used fintech in the past year plan to use it the same amount or more going forward. The frequency of fintech use also jumped, with the proportion of fintech users who use their apps daily rising 11% from 37% pre-pandemic to 48% today.

This makes me bullish on fintech.

The companies, operators, builders, investors, and teams building fintech products have tailwinds.

Fintech products not only help consumers save time and money, but they help people better track their finances, gain financial control, and develop better habits.

When I co-founded a neobank for kids and families, parents would often tell me during user studies that they (the adults) needed more education than their kids.

As finance becomes more digital, people value the ability to control their financial information.

For the first time, the products that can help with financial empowerment and education for adults are fully available, at scale, for people to user.

Financial confidence is a particularly salient benefit of the rise of fintechs.

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