As the world is anxiously anticipating the arrival of
long-awaited vaccines and people are hoping that the new 2021 will bring things
back to normal, we are asking ourselves what the future of the global fintech
industry might look like in the next twelve months.
When the majority of the world’s population was forced to
stay at home and amend the usual way of doing things in order to abide by the
newly introduced healthcare regulations, digital space had experienced a rise
like never before. Since the majority of goods and services became available
via the Internet, it is no surprise that the demand for fintech services and
alternative payment solutions was increasing simultaneously. But will the
fintech Renaissance carry on to 2021, or will the development of this industry
stop as soon as we can get back to our normal way of living?
3 main fintech trends to look out for in 2021
It is hard to say whether fintech will actually be able to
take over the world and change our understanding of financial services once and
for all in 2021. What is clear though, is the fact that the industry will
continue to evolve and shape-shift - and here is how:
1. Remote payments will continue to grow in popularity
As mentioned earlier, the outbreak of a global pandemic forced
various goods and services to adapt their functioning to the new realities of
the world in a healthcare crisis. However, as the companies change their
operations, and customers are getting more and more comfortable with digital
payments and no-contact deliveries, chances are - they will no longer want to
go back to how things were before. When you have a chance to avoid long waiting
in the queue and the coins rolling around in your pocket because that was the
change you were given, you will probably do just that. Thus, it is likely that
in 2021 alternative payment solutions will only increase in demand, and enhance
to best serve the interests of ordinary customers and large corporations alike.
2. Alternative banks will charge subscription fees
Neo banks like Revolut and Menzos provide a good
illustration of what future banking may look like. However, interesting as they
are, they might not be earning enough to keep themselves afloat - based solely
on the people’s fascination with the concept behind them. The reason why
challenger banks might start to charge the subscription fees in 2020 is that
most of their profit is generated via Client Incentive Agreement with the card
networks. What this means is that they get paid per the card they issue,
however, it seems like today people already have enough cards already, and
might not subscribe to any new ones. Thus, many experts believe that in 2021,
neo banks will both charge a subscription or a service fee, as well as introduce
various new features that would keep the potential clients and investors
interested in the services that they have to offer.
3. Fintech giants will continue to absorb their competition
to maintain their hegemony
An unfortunate, yet common trend of the fintech giants
buying out anything that challenges their position is likely to continue in
2021. Although it is true the government authorities are beginning to realize
the potential damages caused by the unruly behavior of the large corporations,
it is unlikely that a certain legislature will put a meaningful end to it in
2021.
Nevertheless, with Facebook facing legal repercussions for
the acquisition of WhatsApp, as well as Visa, being sued for similar actions
against Plaid, it is possible that the way in which giant fintech corporations
get rid of their competition will not end, but rather change slightly. Instead
of carrying out a full takeover, corporations might resort to major investments
and creep acquisitions, in order to control, rather than buy out the
competition completely.
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