2020 and 2021 saw a massive expansion of digital offerings across nearly every industry. Many organizations implemented new partnerships to offer digital commerce and payment tools, or even invested in creating their own tools to address the abrupt and urgent need created by the pandemic.
This trend was particularly evident in the digital health market, which has expanded rapidly and is expected to be worth $1.5 trillion by 2030. Businesses offering payments processing and insurance solutions have also been on the risethey were the most represented on CB Insights list of 2022s most promising fintech companies. According to Allied Market Research, in 2021, the global customer engagement solutions market was valued at $18.5 billion. At its project compound annual growth rate (CAGR) of 10.2%, it is expected to reach $48.4 billion by 2031.The strong will survive
Now, however, the companies and solutions bolstered by that boom have begun to settle. Some digital implementations have proved to be more costly for companies and frustrating for customers than they have been beneficial.
For this reason, Forrester predicts that in 2023 a third of digital businesses will reevaluate or restructure projects that have proven overly complicated and provided little pay-off. The organizations that come out on top will be those that offer truly effective tools, and demonstrate a clear investment in continued improvement.Fintech differentiators
The companies that succeed will also be those operating in sectors with consistent need. Both health care needs and utilities payments are inescapable facts of life, meaning the companies working to offer ease in these areas have a reliable base of consumers who are deeply invested in connecting with a solution that works for them by offering what they consider most important.
Customer behavior is directly shaped by the need for ease. McKinsey found that 62% of customers prefer digital self-service options over speaking with a customer representativeprovided that those options work. After all, Gartner polling suggests that the quality of customer experience determines 66% of loyalty.
In addition to ease, security will be a key factor in determining customer behavior. According to Deloitte, 81% of consumers lose trust in an organization that is subject to a data breach, and 25% stop interacting with that organization altogether. This is especially true for companies handling data related to health and finance, which are particularly sensitive.
The companies that succeed will also offer not only their own set of solutions, but also integrations with solutions that customers are already familiar and happy with (such as Venmo, Paypal, and Apple and Google Pay). Consumers already enjoy this convenience in their payments experiences in other sectors. The need for ease, security, and top tier integrations in digital health and utilities payments represent a significant market opportunity.Key insights
Payments represent one of the most frequent interactions organizations have with their customers, and the best opportunity to either make those customers happy and build loyalty, or disappoint them and contribute to churn. Fintech innovations across industries have led consumers to expect a smooth and even delightful experience from all of their online payments interactions.
In 2023, the companies that will continue to grow will differentiate themselves by offering truly integrated and effective digital payments.
