My team at Fintech Weekly, our weekly newsletter covering everything Finance, reached out to 18 of the smartest people in Fintech to find out what trends they see happening within the space over the next 12 months. Here’s what they had to say:
- Autonomous financial services are where I think we are heading for the retail banking market. The future is already here just not evenly distributed. Customers want to know if the brand they are entrusting their wealth with will take care of them. That they are being looked after and not taken advantage of.
- Challenger banks in the UK stop being a future threat and become a present one. Customer numbers scale as does their range of offering to make the likes of RBS, Barclays and HSBC to finally admit they are losing customers and revenue due to the presence and performance of Monzo, Starling, Revolut and Tide.
David M. Brear – CEO at 11FS
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As the CEO of an investment platform, I’ve been right at the heart of the biggest story of 2020/21 – the rise of retail participation in capital markets. It’s a paradigm shift I like to think that eToro – as one of the first fintechs on the scene in 2007 – helped to fuel.
We’ve always been clear that our vision as a company is to open up the global markets so that everyone can trade and invest in a simple and transparent way. In 2020 we saw that vision become a reality; we added 5 million new users to our platform globally. This has accelerated in the first three months of 2021. In January alone we added over 1.2 million new registered users and we now have over 20 million users globally.
We believe that the growth in retail participation is here to stay. As the retail investment market matures and platforms like eToro scale, we have an even greater responsibility to ensure that our users are well educated and aware of the risks.
Yoni Assia – Founder and CEO of eToro
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Acceleration to adoption, not just implementation!
April Rudin – Founder and President of The Rudin Group
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We see continued momentum for Real-Time Payments (RTP) which enables immediate availability of funds, settlement finality, instant confirmation, and integrated information flows—all in a payment made in seconds. We’re now seeing millions of dollars in RTP transactions, and coverage is over 60% of checking accounts, meaning it is quickly becoming a practical option for all kinds of businesses.
Dimitri Dadiomov – Cofounder & CEO of Modern Treasury
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Beyond embedded finance, I believe companies will realize the need for additional Payment operations as a service. Organizations are starting to realize you can’t kind of do payments and banking, you have to go all in to do it well. And that’s not most companies core business.
Craig J. Lewis – Founder & CEO of Gigwage
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The explosion of retail investing will continue and move way beyond traditional public markets. We’ll see many new asset classes emerge as everything becomes “investable”: sneakers, cards, art, memes, creators, celebrities, athletes, experiences? A lot of this is already happening with things like NFTs/Beeple and we’ve barely scratched the surface… The financialization of everything is going to be VERY fascinating. (very good for society too, IMO, because it increases knowledge/reduces inequality)
David McDonough – Founder of Commonstock
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New data driven lending models and verticals will become more popular.
Revenue Based Lenders like Uncapped popularised lending to companies, which historically couldn’t get any capital. This happened due to the availability of new data, like e-commerce and payment processor integrations. Similar disruption will happen in new verticals.
I’m particularly excited about creators economy, and allowing new generations of content manufacturers to monetise their work faster, and able to reinvest it in more, higher quality productions. New financing models for artists, gamers, streamers and video-makers of all kinds will emerge around the globe.
Piotr Pisarz – Co-founder and CEO of Uncapped
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Affinity markets will become even more in demand. With consumers spending more time at home during the pandemic, finding a tribe, even if a virtual one, is an important ingredient. As with all things fintech, as retail and business neobanks emerge focused on their unique market segments, new third-party fintech providers will be within arm’s reach.
Donald Hawkins – Founder at First Boulevard
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As open banking begins to overtake scraping in the US, banking data aggregators will have the opportunity to build a new marketplace for third-party enrichment layers atop the transactions themselves, opening up an entirely new ecosystem for intelligence and automation.
Trent Bigelow – CEO of Abound
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New pioneering SMB lending models – such as revenue-based financing – will grow in popularity as alternatives to VC and bank loans become mainstream. This is especially true for ecommerce businesses, who have experienced massive growth in demand fueled by the pandemic shifting customer behaviours, and need new capital for marketing an inventory to continue scaling.
Asher Ismail – Co-founder of Uncapped
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-First set of decacorn exits will happen (Robinhood, Plaid, SoFi, etc): there have been a number of unicorn fintech valuations but very few have had exits. 2021 will be the year when they make their public market debuts and we will see if the private market valuations hold up to public market scrutiny.
-Robo consolidation: there are something like 70 roboadvisors in existence (including some that are already owned by larger companies. The vast majority never got off the ground, and some of the higher-flying robos have faltered in their growth. I predict in 2021 we will see massive consolidation with some robos shutting down and others being acquired/merged together.
Anders Jones – Founder & CEO Facet Wealth
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I see a greater involvement on the banks in the Fintech landscape. Every bank needs to improve their operation, update their technologies and adapt their offers to new demands. Fintech will bring them expertise to enter successfully this new phase of the digital age.
Yves Eonnet – CEO of TagPay
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- Neo Banks will continue their rise. In addition to gaining more customers, they will further entrenching themselves into financial services beyond checking and savings accounts.
- ” Alternative lending” will soar. From Affirm to Pipe to Lambda School, there have been a wave of fintechs unlocking value by helping consumers banks usually cannot reach. Traditional banks will not catch up anytime soon, meaning even more alternative lending fintechs will be sprouting up.
- Plaid will be happy it was not acquired by Visa for 5B. Plaid will continue extending its capabilities into many other aspects of fintech, and reliance on their platform will continue to grow with new fintechs.
Mitchell Jones – Co-Founder of Lendtable
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Open banking grew into open finance and now, we are moving truly into the embedded finance space. As consumers flock to frictionless experiences, financial services are no exception. 2020 saw digital-first consumer behaviour spike, with
10 years-worth of ‘institutional digitisation’ happening in 12 months. Banks’ appetite to accelerate innovation is at its height and we will continue to see the momentum of partnerships forming between FinTech and banks, with the trend of Banking as a Service (Baas) on the rise. Through partnerships, FinTechs are being leveraged to optimise the banking tech stack, putting banks back at the natural centre of the consumer’s life.
From a consumer perspective, we have seen some mega trends; COVID has shone a light on the fragility of personal finances, driving consumers to put a renewed emphasis on their financial health. In fact, in a report by 11:FS and Cicero, the four most requested money management features consumers demanded in 2020 were to make a budget, categorisation, aggregate accounts and manage subscriptions. In that allocation or reallocation of money, we see consumers looking to consciously spend and invest, with the likes of sustainability and impact sitting at the centre of those choices.
Joakim Sjöblom – CEO & Founder at Minna Technologies
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Social + Finance
Raphael Steil – Co-founder of getquin
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Globally we’ll start to see increasingly more FinTech companies address the structural challenges and infrastructure needed to unlock the value embedded in opportunities within supply chain finance and the efficient mobilization of working capital.
Jacob Shoihet – Co-Founder & CEO at Marco Financial
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Two of the biggest trends in the past decade have been the rise of the cloud and the increasing availability of specialized software. Both have been hugely beneficial — but they’ve also led to data sprawl, making it hard for businesses to get a single source of truth. The response to the pandemic has accelerated this trend. It’s also brought us to a new inflection point, with businesses adapting the ways they work and the tools they rely on. In 2021, we expect the cloud-native SMB to be the norm, as more and more people and businesses take advantage of new tools. This makes the need to integrate their siloed systems even more critical.
Peter Lord – Co-founder and CEO of Codat
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Major fintech players will consolidate product lines to more full featured offerings, further eroding the competitive positioning of traditional institutions and opening up new segments of the population that were previously reticent to have digital only offerings for primary financial services. Further acceleration in the adoption of cashless and alternative payments as millennials turn 40, and the catalyst effects of the pandemic on no-touch and germ free (digital wallets, NFC, RFID, etc) POS checkout methods continues. Crypto will continue to become more familiar to retail customers/investors, though more price booms and busts are likely before it stabilizes as a primary financial concept for the average household in America.
Brian Hamilton – Founder & CEO at One
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