The landscape of the FinTech industry is shifting rapidly with the pandemic. The acceptance and adaptation of FinTech solutions have steadily increased during these testing times. In the FinTech industry, developments and transformations affect everything related to capital, banking, and payments. In 2021, the focus will be on taking more steps towards the growth of the banking and payments sector. In this article, Loanme talks about 5 global and banking trends in FinTech that you should watch for in 2021.
FinTech Trends 2021: Top 5 Trends To Watch Out For
In this article
- The Battle For Small Business In The Value Chain
- Payroll Fintech Gets Its Fair Share Of Attention
- Financial Health Gets Political
- Fintech-as-a-Service Platforms Emerge
- Banks Step Up Fintech-Powered Core Workarounds
The Battle For Small Business in the Value Chain
We saw three major developments in the fight for small business partnerships; Paycheck protection program (PPP loans), Goldman Sachs and Stripe Treasury. From a small business value chain viewpoint, Amazon, Stripe, and even Square engage in the point of sale or payment activity, which is in the center of the value chain. Activities at the beginning of the value chain and after payments in the value chain are often invisible to Amazon, Stripe, and Square. All in all, financial organizations must be rooted in the value chains of small businesses to compete with players like Amazon, Stripe, and Square.
Payroll Fintech To Get Its Fair Share Of Attention
Payroll fintech companies offer banks the opportunity to divert paychecks away from the checking accounts of incumbents and provide services for payment and lending. To date, developments in the FinTech sector have primarily centered on generating resistance to conventional banks and easing customer digital payments, with little attention given to corporations and employers’ payroll management systems. This is expected to change from 2021 onwards.
Financial Health Gets Political
For a few factors that have nothing to do with what policymakers are concerned about, financial health will take center stage in 2021. It has been a challenge to analyze financial health because self-reported metrics are imprecise. But some businesses have developed robust financial health scores that rely on real account information, such as the Financial Health Network and MX.
Fintech-as-a-Service Platforms Emerge
Fintech-as-a-service has become a popular term and refers to enabling businesses to integrate banking services into their platforms. Companies such as Moov, Synctera and Unit would allow banks to more modularly provide fintechs with a range of services, such as ACH processing, transaction processing.
Banks Step Up Fintech-Powered Core Workarounds
Core workarounds may not be new, but they are disruptions of the value chain in certain ways, like the first two patterns. In this particular case, the technical value chains of banks and credit unions. Overall, the disruption of the value chain is going to be the banking and fintech story for 2021.
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