The year that follows holds so many promises of a better life that folks seem to can’t wait for the New Year’s chime. 2020 was so challenging that everybody expects 2021 to come and save our weary souls, filled with fervent hope for a better future. While we might not know the shape the world will take next year, there are for sure some improvements awaiting us in the fintech sector. Our payments will become even more rapid, efficient, and secure.
Fintech is starting a new leap of its history in 2021, as the fintech industry trends will soar high. Seemingly simple, yet intricate, technologies will change the way people pay once and forever. The fintech industry has already changed our perception of how money works. Nonetheless, it is still interesting to find out what fintech trends we are to expect in 2021.
The year that follows holds so many promises of a better life that folks seem to can’t wait for the New Year’s chime. 2020 was so challenging that everybody expects 2021 to come and save our weary souls, filled with fervent hope for a better future. While we might not know the shape the world will take next year, there are for sure some improvements awaiting us in the fintech sector. Our payments will become even more rapid, efficient, and secure.
Fintech is starting a new leap of its history in 2021, as the fintech industry trends will soar high. Seemingly simple, yet intricate, technologies will change the way people pay once and forever. The fintech industry has already changed our perception of how money works. Nonetheless, it is still interesting to find out what fintech trends we are to expect in 2021.
Before we cut to the chase, let us clarify that while many people might have at least heard about fintech or even used it in their daily lives, it seems like not everyone understands what fintech is. Here comes a succinct and yet comprehensive explanation.
Fintech stands for Financial Technologies, an industry that is nowadays altering the obsolete banking system, making payments easier and faster to both send and receive.
Speaking plainly, fintech is the set of computer and mobile software used to enable financial and banking services. Hence, if you think you have nothing to do with the fintech technology trends, think about the last time you checked your banking app to check your card’s balance.
Let’s start our chart with a trend that is obvious and yet important to mention.
Even if we have the COVID-19 vaccine by the middle of 2021, the world of banking will never be the same. The seed of change has been sowed and there’s nothing to stop the progress that was long due. Financial institutions have done their homework on competitiveness and are now closing in on digitizing every single operational aspect.
Fintech’s business-to-customer orientation saw the first phase of digitalization finalized during 2020. Companies had to find a way to let their customers keep using their services while in the lockdown.
The front-end, as we say in IT, of banks’ digitalization has been sealed and delivered. Meanwhile, updating the back-end functions, such as the automation of back-office procedures, will be a key fintech trend in 2021.
It was not that long ago that banks thought that the queues at their box offices were never going to vanish. People would have nowhere to go to have their funds managed. They believed that this entire fintech hoax would explode like a bubble.
Fintech technologies have become an omnipresent banking solution to the financial sector customers. Now, companies left with no other choice but to unite their ranks and establish partnerships with those developing fintech software.
It is not hard to understand that there is no way the old-fashioned banking system is coming back. Financial institutions face a relatively simple choice to make: go fintech or go down in the history records.
Regardless of how bizarre it might sound, one of the vital fintech technology trends in 2021 will be the presence of more fintech trends. Modern banks are found amid an unwavering need for fintech solutions. Bank CEOs no longer regard them as a disruptor of the good-old system, but a tool to preserve their customers’ loyalty.
Buckle up, and get ready for a fascinating fintech journey in 2021. Next year, fintech is going places. 2020 was all about making sure that the folks in the big cities can enjoy the benefits of fintech. Yet, there are still places where people struggle because they cannot access online banking or any other feature of modern financial solutions.
Since the world is moving toward ubiquitous online payments, fintech has no alternatives but to expand to smaller urban and rural areas.
Following a recent World Bank Report, almost 1.7 billion people still lack access to substantial financial systems. What is more, back in 2018, 69% of adults, which was 3.8 billion people, had an account with an online banking system, as nowadays, it is nothing else but a step on one’s way of fleeing from poverty.
So, we can surely expect the fintech industry expansion among the main fintech trends in 2021.
Given that we have already mentioned the extension of limits, let’s stay even more truthful and acknowledge that the brick-and-mortar banks’ days are over.
Banking platforms are going online with no waste left, as the age of neobanking is looming bright on the horizon of irreversible changes. A neobank is nothing else but a bank without physical branches that performs on the cloud premises.
You have probably heard about the Internet-only banks. Well, here they come, capturing more and more customers with the exquisite level of comfort they offer.
The banking industry digitalization is set to move banks so close to the customer that they would not need to leave their homes to get a full-fledged banking service experience. Neobanking is surely going to become one of the key mediums of fintech extension in 2021.
More financial operations mean an enhanced security level required. As fintech becomes the core platform for global financial operations, we can surely expect the cybersecurity bar raised.
In fact, it is not that hard to understand that the software developers would need to become more aware of fintech services their customers use. The more money goes online, the more scammers and thieves are there to make use of it.
Cyber hygiene is something to be taken care of in 2021. This is not even a trend but a need for a successful fintech expansion agenda launch.
Without further ado, let us discuss one of the ways software developers can achieve the cybersecurity level mentioned above.
The Internet of Things is an integral part of human lives and biometric security measures are nowadays a need and not a whim. With mobile banking being largely dependent on how well its servers are protected and the double-authentication systems adapted, there is more the fintech software developers need to look right into the depth of the matter to find a fitting solution.
There is nothing more personal and unique than the biometric data that each of us holds. It cannot be copied, thus rendering biometric-based security measures as one of the major fintech trends in 2021.
As of now, there is no better way to take customers’ money security to a whole new level. Furthermore, biometric sensors are no longer deemed reliable. Expecting lots of new types of biometric data usage in the fintech industry shortly is the right thing to do. Yet, we will talk about the new biometric security solutions a bit later.
Fintech technology trends to enjoy in 2021 will talk a lot about using real-time data. It will be applied to tracking down better loan and credit solutions. The obsolete tradition of scrutinizing a person’s credit history will fade away. It does not provide an accurate picture of the person’s current solvency. This is a rapidly-changing world that we are living in where tables can turn as simple as that.
The from rags to riches stories are nowadays aplenty. Nobody judges people on their credit histories of the past. In 2021, tracking real-time cash flows will impact the majority of loan decisions. What is more, there is a fervent need to understand that 2021 will become the year of renewal: businesses will need loans to rebuild what they’ve lost in 2020. Looking at their fiscal flow in 2020 would have indeed not been the best decision to make. Hence, real-time data it is.
John B. Watson invented, in the first half of the 20th century, what is nowadays called behavioral science. Yet, he did not think that behavioral psychology would become an integral part of the finance industry. Yet, it has already been proved that economy is rather a study of human behavior than money (Packin, 2013). It was only a matter of time before we would proceed with behavioral science patterns in fintech.
It took humanity quite some time to start analyzing the motives behind our decisions. Yet, the process has been launched and behavioral psychology currently lies in the core of many industries. Understanding people’s behavioral patterns is going to be a hit in fintech of 2021.
The number of clients served by the fintech industry amounts to billions, and it will grow. Knowing your customers’ goals and behavioral models is essential. Dealing with money, you have to stay cognizant of how people act in a variety of circumstances.
Thus, we can surely expect more tech integrations dedicated to behavioral analysis in the fintech code stacks in 2021. Analyzing your customers’ innate nature is the best you can do for making the right decisions in the fintech business of the future.
While this fintech trend seems to be quite obvious, there is still a need to mention it. Get yourselves ready, folks, as mobile payment options are going wide in 2021.
Yet again, let us all say a big “thank you” to the coronavirus pandemic, as it has fostered the need for developing new ways of paying for things. Social distancing keeps us restrained from free urban movement. Hence, if the banks want to keep their customers loyal, they have to widen the scope of mobile payment options.
It looks like the borders will yet be closed in 2021, at least partially. Well, the exponentially rising levels of financial freedom might become a consolation we’ve all been waiting for.
Banks are no longer willing to keep their customers on a leash of their physical branches. CEOs and executives understand that as soon as a bank that offers more freedom to their customers appears, they will migrate to a provider that ensures free payments that are not shackled to one banking system.
We should expect a lot of networking between banks in the next year. The banks’ desire to stay afloat is not the only reason to mention here. The Second Payment Services Directive (SPSD-2) leaves them no other choice. It ensures that banks share with authorized bodies the data required for creating a comprehensive financial cooperation platform that caters for the cooperation and security needs of every player in the sector.
Extensive usage of APIs and AI within open banking – one of the core SPSD-2 provisions – will bring accountability to financial operations. An increased number of prevented scams and frauds will become another benefit to enjoy.
Open banking is growing large next year, as per experts’ forecasts. Having generated a profit of $7.29 billion in 2018, it is expected to grow to $43.15 billion by 2026 (Allied Market Research, 2020). Hence, more room for open banking in the fintech trends 2021 has already been booked.
Satoshi Nakamoto, the man who has invented Bitcoin (well, at least it was the pseudonym he used), had come up with the first blockchain theory back in 2008.
Blockchains are nowadays used as the world’s most popular ledger of cryptocurrency (and not only) transactions that anyone can trace and access. Predicting how much popularity the blockchain technologies will gain is a Sysyphean labor. Yet, their presence within the fintech trends of 2021 has been ensured by the major industry players’ need to adopt them.
Blockchains utilization adds the element of traceability to online banking, preventing any unauthorized party from accessing the funds. Furthermore, blockchains help verify the authenticity and legitimacy of the assets. With improved security being a core of fintech development in 2021, we can surely expect blockchains looming on the horizon of relevancy.
Today’s customers have no time to stay on the line “because their call is utterly important to the bank.” They require rapid answers to their questions and issues. One of the leading fintech trends to follow in 2021 will be devoted to this. Get yourselves ready for an extensive rise in the number of communication tools between banks and customers.
Everyone, regardless of their special needs, has to find those communication platforms easily accessible. If you’re already using fintech software, which is quite probably the truth, you can expect its communication features refined next year.
We can easily expect digital wallets to be among the main fintech technology trends in 2021 simply because people want to feel free when making transactions. The primordial era of online payments being chained to the internal system of one bank is long gone.
Using a digital wallet lets people transfer their funds wherever they find it necessary and convenient. The industry players will have to come up with an extended range of digital wallet services. Transactions facilitation can be deemed the ultimate task of the entire fintech industry for 2021.
It seems like there is no need to explain what bitcoin and cryptocurrencies are. Bitcoin and other cryptocurrencies, as well as fintech technologies, have already existed for more than ten years. Yet, nobody paid attention to them, as they were of no value to the world.
Nowadays, with the fintech technologies and cryptocurrencies gradually becoming the key financial instruments, governments worldwide are starting to react. The lack of governmental regulatory legislation on the use of cryptocurrencies will be ousted by an increased number of corresponding laws and provisions passed in 2021.
The fintech industry will go through a legal rehaul as it will be adopted as the key financial platform for the global economies to thrive upon.
Last but not least is the fact that banks and financial institutions will be looking dearly into becoming faster.
Artificial intelligence systems are nowadays being adopted by banks worldwide as the greatest facilitators of autonomous decisions. There is nothing to be surprised about – they are faster and more efficient than humans.
Yet, there is no mention of cutting the company’s manpower loose, as RPA is being adopted within the framework of letting people deal with more creative and higher purposes within a company.
It doesn’t take much wit to understand that the fintech trends will impact everything today’s businesses are even partially related to. The fintech industry is the platform where the foundations of today’s businesses’ future are being laid.
Nonetheless, with banks and financial organizations heavily reliant on today’s customers’ preferences and requirements, the fintech industry will be regarded as the tool to be used in their hunt for keeping the customers loyal.
The distant past of queues, cash payments, and deteriorated financial security vanishes into thin air as you’re reading this article. The future comes soon, and it wants you to be a part of it. The sooner you enter the fintech industry, the closer you get to stability and, what is more, predictability of your financial performance. The fintech industry trends in 2021 will grant:
the implementation of neoteric biometric data is instrumental and imperative in making the fintech industry even more secure than it was.
customer-orientation is the industry’s top priority in 2021.
analytical decision-making and legal compliance are on the list of fintech goals in 2021.
the implementation of neoteric biometric data is instrumental and imperative in making the fintech industry even more secure than it was.
fintech aims at being a unified platform for free payments worldwide, and your customers will definitely appreciate the part you play in this endeavor.
Financial Inclusion on the Rise, But Gaps Remain, Global Findex Database Shows. (2018). Retrieved 19 November 2020
Fintech Market | Size, Trends, Forecast | 2020 – 2025. (2020). Retrieved 17 November 2020
Growth in Fintech Investment Fastest in European Market. (2015). Retrieved 17 November 2020
Metev, D. (2020). 2020’s Voice Search Stats – Is Voice Search Growing?. Retrieved 20 November 2020
Open Banking Market Size to Reach $43.15 Billion by 2026, at 24.4% CAGR. (2020). Retrieved 20 November 2020
Packin, Nizan Geslevich, It’s (Not) All About the Money: Using Behavioral Economics to Improve Regulation of Risk Management in Financial Institutions (March 3, 2013). University of Pennsylvania Journal of Business Law, Volume 2, Issue 15, 2013 , Chicago Booth Research Paper
java
skala
.net
python
javascript
devops
ios
android
Angular
React
Node.js
java
skala
.net
python
javascript
devops
ios
android
Angular
React
Node.js