2020 is going to be important, and most likely, a milestone year for the fintech industry going forward. We are just beginning to see the initial trends that could drive a new state of the industry going forward. If the big industry players in the game aren’t careful, the age of technological innovation may just push them out.
There are some very important new trends that are beginning to flesh out and are sure to have a huge impact on financial technology, both B2B and B2C.
Some of the most important 2020 Fintech Predictions include:
Autonomy platforms consist of services that help people perform jobs or important tasks without the need for traditional third-party services they typically require. Cloud services such as AWS and Microsoft’s Azure are helping startup developers and founders get from idea to MVP faster than ever before. They offer no-code programming and the full stack of tools necessary that range from building a front end to establishing an open database capable of performing AI analytics. Platforms that disrupt traditionally difficult processes and help streamline important processes for entrepreneurs and coders are sure to thrive in the coming decade.
Big Banks Are Showing Signs of Innovation
It has been a long time since the big banks were thought of as innovators to fintech. Not since the introduction of the first debit card have banks shown the signs of innovation as they are now. Banks are getting wise to the many startups around the world that are trying new things and showing legacy customers that there may just be a better way forward. Bank of America now holds more patents surrounding blockchain technology than anyone in the world and JP Morgan is hiring more researchers and technologists than ever before to help drive innovation.
While not much has been made public as far as the progress they have made, we can be sure that they are hard at work and that change to their legacy systems is coming.
97% of organizations are planning on increasing their focus and spend on personalized services and user experiences. If you are working on a startup or are keeping an eye out on how to get ahead in the coming years, personalization is critical. The ability for users to feel unique and as if they are being treated personally rather than just another number is what will separate the good businesses from the greats in this decade.
The best technology companies investments in personalization has been telling; tech giants like Amazon, Google and Spotify has been able to gain massive market control due to their personalized services. Spotify uses customer data to personalize recommendations, music feeds, and the search function all users use. Recently, they extended this service from being subscription-only to now being partially available for free. In the past, these personalized experiences have helped skyrocket Spotify’s subscriptions, and now they hope this extension will spark even more (they anticipate a 30% increase this year).
Big Banks Still May Be In Trouble
While big banks have in fact been adapting and diverting resources to important R&D processes, they may need to watch out for paycheck-replacement services and digital-only banks. Services such as Earnin’ or Dave are offering users easy alternatives to high-cost payday loans and are even offering personalized financial advice as a supplement to this service.
According to a recent survey performed on behalf of the American Bankers Association, over 70% of consumers handle all of their banking needs on mobile, with only about 18% ever visiting a physical bank branch. People just adore this convenience – and with the advent of the aforementioned paycheck services they have nearly complete control over their funds over digital platforms. We can expect entities to popup that offer all of these services in a single platform, with options that include prepaid cards and bare-minimum fees. Neobanks like Chime are already offering this alternative, and looking forward, more advanced offerings could potentially remove the need for a bank at all.
What’s Coming Next
The outlook for Fintech is exciting. The field is ripe with competition, and this intense competition is driving rapid innovation. We have already seen creative approaches to digital banking, advanced tools that are helping founders get to market faster, and digital banking trends that are seriously threatening the biggest banks in the world. Looking forward, startups and small businesses should aim to take advantage of these emerging fintech tools and learn how to apply them to create a personalized approach for each customer. Just don’t count out the big players – because they surely won’t go down without a fight.