Our fintech predictions for 2021
What. A. Year.
Suffice to say, 2020 has been a year like no other. Some industries have been dealt a crushing blow by the pandemic, and while fintech hasn’t come out of it unscathed, parts of the industry have flourished.
Challenger banks started to be taken more seriously as physical branches closed during lockdown in the UK and digital banking soared in popularity. More banks, brands and providers saw the benefits of adopting Banking as a Service (BaaS) - much to our delight. And there were some mammoth acquisitions in the fintech space, including Visa’s buyout of Plaid, Intuit’s purchase of Credit Karma and Mastercard snatching up Finicity.
But with many of us glad to see the back of 2020, our thoughts are turning to the new year. So without further ado, here are the 11:FS experts’ predictions for 2021 🔮
Don’t forget to tune into the Fintech Insider podcast on 1st January, where we will dive deeper into our trend forecasts!
1. Banks will have to go all-in on digital 📲
One of the biggest questions we’ll be asking ourselves on the show is will there still be resistance to digital in 2021? The pandemic triggered an uptick in contactless payments and mobile banking, so much so that it’s possible that there’s now no other option for many consumers.
Could this be proving David’s prediction from last year that challenger banks in the UK are no longer a future threat and becoming a present one? We’ll have to wait and see 👀
2. There's a gap in the market for tailored financial advice💡
Personalised financial advice that takes into account customers' holistic financial situations has been in demand for a while now. More and more businesses are realising that - when it comes to money - one size does not fit all. And coronavirus has only accelerated the need for this (as could Brexit), as the gaps between rich and poor become increasingly clear.
While the complex regulation around ‘advice’ might put some firms off, it’ll be interesting to see which businesses take advantage of this gap in the market.
3. Autonomous finance is where retail banking is headed 🏦
Automating your finances can save you time and money, from apps that find and switch you to a better energy deal to the businesses investing your money for you. We’ve already witnessed the popularity of brands like Nutmeg, Cleo and Chip, and we’re only going to see more of these business models appear.
The successful rollout of automation in retail banking does, however, raise important questions about financial inclusivity. AI biases will need to be addressed, and it’s vital that we don’t reinforce the same privileges and exclusions of traditional financial services.
4. We’ll see more bank M&A at scale 🛒
The sale of BBVA’s US subsidiary to PNC for $11.6 billion was one of the biggest FS deals of this year. And PNC is now the 5th largest bank based on asset size thanks to the acquisition. But next year could be even bigger.
Regions, US Bank and Citizens are all potential M&A targets, so we’ll be eagerly watching this space to see who gets snapped up first. But we can’t ignore the fact a new US government will be in place next year - what will Biden’s reign mean for the industry? Let us know what you think over on Twitter and LinkedIn 🤓
Tune into the Fintech Insider podcast on 1st January 2021 for more insights from the team about their predictions for the upcoming year! Plus, there are hundreds of episodes ready and waiting for you if family time gets too much over the Christmas break 🎄