What does 2021 have in store for fintech?
Like all industries, the fintech sector has experienced its fair share of challenges in 2020. Although there were many obstacles to overcome, COVID-19 has also triggered (or accelerated) new opportunities.
While it is never easy to predict the future, particularly in uncertain times like these, there are undoubtedly a number of important trends that are likely to become more prominent in the coming 12 months.
Fintech's unavoidable 'new normal'
Starting with the most obvious one: COVID-19 will continue to have a significant effect on fintech. Important questions must be answered as finance companies consider their priorities for 2021. Most notably, given fintech will remain a crucial part of consumers’ and businesses’ day-to-day lives, how are firms going to deliver services that meet the evolving needs of their customers?
An unprecedented reliance on technology means that banks offering a poor user experience and services via their apps or online platforms will quickly fall out of favour. This point will only become more pronounced in 2021. The sad reality is that many bank branches may never reopen, and fintech solutions will have a key role to play in improving the availability and accessibility of financial services.
Eyeing up the competition
The path to profitability will be a key consideration for fintechs in 2021. The sector has gained considerable traction in recent years, both in terms of public support and investment, and new players are entering the market on a regular basis.
As the industry becomes yet more established, the clarity and validation of business models will become much more important. After all, not all existing banks, lenders and fintech vendors will survive in their current form.
Players that are looking to enter and establish themselves in the field must acknowledge the importance of having a solid value proposition – one which is clearly differentiated from their competitors. To do so, fintech vendors will need to demonstrate that their products work at scale. Key determinants of success will be whether their target groups are large enough, and whether the technology architecture can handle large scale growth.
Unlocking the promise of Open Banking
Now comes the time for Open Banking solutions to go beyond simple use cases. In the coming months and years, the apps we will build on top of it will become increasingly more sophisticated.
Furthermore, the impact of data sharing will soon extend into all financial markets and unlock a host of new financial products. In the coming 12 months, we will see the mortgage, pension and insurance markets all joining the Open Banking revolution to create a truly sophisticated financial ecosystem. It ought to pave the way for more personalised, responsive banking experiences.
Breaking down international barriers
Last but certainly not least, 2021 will see a further dissolution of international barriers. New methods for people to pay their bills and make purchases cross-border will be among the key priorities for banks and fintech vendors. The ability to transfer funds easily, without the requirement to switch accounts in order to do so, is one example of the kind of innovations that we are sure to see more of. Such solutions will serve to significantly reduce the fees and the time it takes to make cross-border payments.
2020 has been very difficult for many people and businesses. Despite the challenges, however, the fintech sector is looking to enter 2021 in a position of strength as developments are accelerated and new trends come to the fore. No doubt, the coming months will require a lot of thoughtful responsibility from fintech, as it will be one of the key factors to bringing stability into the “new normal” and setting the economy back on track.
Ammar Akhtar is the co-founder and CEO of , a London-based technology company. Founded in 2016, Yobota has built a fast, flexible, cloud-native core banking platform, which allows clients to create and run innovative financial products.
Five minutes with Helene Panzarino, Associate Director, LIBF
Name: Helene Panzarino
Role: Associate Director for Digital Banking and Finance
Company: The London Institute of Banking and Finance (LIBF)
We all know the companies, but what about the people behind them? Here, we find out more about Panzarino’s background, why she’s an advocate for entrepreneurs, and her take on US community bank heroism.
Who was your childhood hero, and why?
My dad. It may seem a bit of a cliche, but for someone who left school aged nine, he instilled in me the value of education and self-belief. He also had enormous pride and confidence in me and my abilities. He was my biggest supporter and a wonderfully innocent and kind person who helped shape the person I am today.
What's the best piece of advice you ever received?
‘Mentors are great, but advocates are better.’ I discovered that it's much harder for entrepreneurs to find true advocates, so this is something I try to do for other people.
Which activity are you most looking forward to doing when the pandemic is over?
I can't wait to go to Terroni Brothers in Clerkenwell, London, for some authentic Italian pastries and an espresso that I haven't had to make myself! I wrote most of my books in cafes, and I find a change of scenery also helps me think outside of the box on all my projects.
Is there a personal achievement from 2020 of which you are particularly proud?
I am most proud of having my second book, Reinventing Banking and Finance: Frameworks to Navigate Global Fintech Innovation, published by Kogan.
This book's schedule was very tight, and I was fortunate to have Alessandro Hatami, a good friend and industry peer, as co-author. We've received industry accolades, powerful endorsements, and many compliments on the clarity of thought and content, so it made it even more worthwhile.
What inspires you in fintech today?
I am hugely inspired by the way community banks in the US have become the unexpected heroes of the pandemic, getting money into accounts quickly but also being there for their customers as trusted partners.
Many community banks have been big enough to recognise that they could do more to support their customers, and it has been hugely inspiring to see them partner with the fintech community to drive operational and customer service improvement.
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