TechDogs-"Top Banking And FinTech Trends For 2021"

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Top Banking And FinTech Trends For 2021

By TechDogs

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Did you know that credit cards have been around since the 1950s? Yeah, Diner's Club introduced their universal credit card in 1950 - over 70 years ago! All because a New York businessman named Frank McNamara forgot to bring his wallet along when he went out to supper with his wife. Imagine if Frank had a chance to see what disruption his invention caused- virtual banks, wireless transactions, online banking and whatnot.
 
From such humble beginnings, Financial Technology has grown by leaps and bounds and is still evolving today. What made FinTech more critical was the Covid-19 pandemic. Whether it's online payment platforms like PayPal or digital-only banks like N26, we've all certainly engaged with FinTech in some capacity recently. Traditional financial institutions and banks have also recognized the need to adjust to the changing economic landscape - and adopting FinTech trends is indeed the way to go.
 
What are you waiting for? Dive right in!
TechDogs-"Top Banking And FinTech Trends For 2021"
Congratulations! You are the chosen one. You get one-time access to our secret TechDogs’ Time Machine. No kidding!
 
Hop on–we are taking you for a time ride! Zooooooom! Can you guess where you are, or would it be when you are? #DarkReference.

You are in the Medieval Times!
 
Do you see some awesome castles and knights riding on horses and markets buzzing with people? Surely you would like to take some memento back with you. How do you think you would do that? You cannot swipe your flashy cards or payment gateways to buy an authentic sword! You need coins of whichever kingdom you are in or worse, barter system. That kind of primitive world is not somewhere technology-loving TechDogs would be appreciated. Let us go back to the 21st century please!
 
To merely imagine a world where finance is not driven by technology feels slightly nightmarish today–and for a good reason. Finance Technology has come a long way and is continuing to make financial management easier with each passing day. It is only reasonable to be up to date with the latest tech trends; otherwise, you would probably be the only one relying on a barter system in a world of shopping cards and e-banking.
 

Trend 1: Can’t Wait To Automate


Isn’t it amazing how some payment portal autofill the OTP (One Time Password) you get while making a transaction if you’re using the same phone for payment? Typing or copying 4-6 digits from your messaging app to your transaction portal can be so much work. #welazy
 
We’re not being sarcastic, technology has spoilt us all for ease and businesses are no different, businesses today are leveraging Robotic Process Automation or RPA to automate processes such as customer onboarding, verification, data analysis and reporting, compliance, risk assessments and innumerable other repetitive monotonous tasks.
 
A lot of it has already kickstarted and the results are out in the open. So far, over a third of financial services firms witness a two to five percent increase in overall growth due to automation. Invariably, 2021 would be a year when financial institutions would openly begin implementing RPA. In fact, as per the Deloitte Global RPA Survey 2018, if this RPA growth continues, RPA will achieve “near universal adoption” in the next 5 years.
 
TechDogs’ Opinion: Unlike a common apprehension, RPA would not take away regular jobs. It would assist the workforce in their routine and repetitive tasks, helping them focus on more value-driven activities, including customer interaction, strategic planning and collaborative jobs. Assisted RPA integrations deploy bots via the enterprise server to an employee’s workstation, who can then control where and when it is used. So no, guys, it’s not the beginning of the end! 
 

Trend 2: Neobanks Will Be In Neon


TechDogs-Trend 2: Neobanks Will Be In "Neon"-2D Image Of Mobile In Referenc To Neobanks (Digital Banks) vs Traditional Banking Services
Right now, most of us have a bank that offers several digital services. However, you do end up paying a visit to the bank once a month, to say the least. Well, similar to last year, in 2021, a lot of people won’t be able to do that. No, we’re not implying another lockdown or anything. It’s just a lot of people would have accounts in Neobanks. There won’t be a physical bank for them to visit physically.
 
Neobanks are digital-only banks completely set in the cloud (not the ones in the sky–the digital cloud!). Every part of their service is available and managed online, which means? No long queues and grumpy tellers to deal with! With more and more sophisticated online and mobile banking services, Neobanks would surely come to the limelight (a neon one at that!) in 2021.
 
The ones already in place are rapidly rising to fame. For instance, San Francisco-based Chime, the largest US Neobank, had over 7.4 million account holders in 2019. After last year, it is projected to grow this figure to 19.8 million by 2024. We bet they’re going to hit these numbers much before that!
 
TechDogs’ Opinion: You can expect two parallel repercussions of this trend. Firstly, more and more Neobanks would pop up, providing a better user experience and hassle-free banking services. Neobanks would provide customers effortless access to banking products and services without being tied down to a physical location or timing. At the same time, traditional banks would focus on digital transformation by adopting digital and mobile-first financial solutions and mobile-friendly applications to stay relevant in the market.


Trend 3: FinTech To FinEducate


TechDogs-Trend 3: "FinTech To Fineducate"-3D Image with Three Characters Learning About Financial Management System-The Importance Of Financial Planning And Budgeting For Financial Stability
The more people are learning to use newer payment mode, the lesser they’re actually aware of their financial management. We’re not saying that–but a Bankrate report reveals that people are increasingly drying up their savings or don’t have them in the first place.
 
It reveals that an average American household has a total of $8,863 worth of savings–a number that’s even lesser for younger folks and bachelors. Not just that, more than half lack sufficient funds for their needs. The FinTech industry has reasons to believe that lack of financial literacy is a major contributing factor in this.
 
So, the FinTech industry is now busy not only in making payments and banking more accessible but also driving financial literacy so people can make wiser financial choices.
 
TechDogs’ Opinion: FinTech will use Big Data to help people with poor financial management skills learn from those with expertise. It would be like introducing Amy Santiago in Jake Peralta’s life, just for dealing with finances in a better fashion. (She got him wedding insurance for crying out loud!) Financial literacy is gaining popularity amongst the working class as the pandemic revealed the importance of financial planning and budgeting for financial stability.
 

Trend 4: Blockchain Would Block More Radius

 
The FinTech industry was the first one to be introduced to the wonder that is blockchain. It made transactions so secure and safe that we could go on and on about how amazing it is.
 
In 2021, more and more financial firms would not only agree with us but also adopt blockchain.
They said so themselves last year. A 2020 Insider Intelligence report revealed that 48% of banking executives believe new technologies like blockchain and artificial intelligence (AI) will significantly impact banking. In fact, a lot of banks are already trying out blockchain as a way to streamline processes and cut costs.
 
TechDogs’ Opinion: It is impossible to talk about emerging technologies in the field of banking & finance without mentioning blockchain. Soon, blockchain would not just be a means to enhance transactional data security and integrity but a broader, more comprehensive industry-wide banking standard. There would come a tipping point where blockchain would be so commonplace in FinTech that new regulations will be made to monitor its applications.


Trend 5: We’re Open! That’s What Banks Will Say


Before you jump to conclusions and wonder, “when were banks shut?” we are not talking about banking being physically open. In 2021, banks would instead explore being more honest with one another.
 
So far, we do have inter-bank transactions happening quite seamlessly but that’s the extent of it. Going ahead, you can expect open banking to become the norm. Open banking would allow data to be shared across instructions. Though in place for quite some time, the concept gained momentum in the market with the Second Payment Services Directive (PSD2), which required banks to share their data securely with other authorized organizations online.

TechDogs-Trend 5: "We’re Open! That’s What Banks Will Say"-2D Image Of Before And After PSD2 - One Fintech App Can Access Multiple API's - The Concept Gained Momentum In The Market With The Second Payment Services Directive (PSD2)
From generating $7.29 billion in 2018 and open banking is now expected to reach $43.15 billion by 2026. So, an upward trend is inevitable in 2021 when it comes to open banking.
 
TechDogs’ Opinion: Open banking will be an excellent addition for customers and businesses alike as they will have a complete view of their accounts and financial transactions, making monetary planning more straightforward. Once open banking becomes widely accepted and implemented (which won't take long), it would allow better financial decision-making and long-term wealth generation. By promoting sharing of transactional data, open banking will increase customer engagement as well as provide an agile and future-proof banking method.


Closing The Account (Oops...The Article!)


The five FinTech trends we mentioned may seem diverse and based on various technologies; however, they all say the same thing - customers want robust security, convenience and transparency while performing transactions. We mean, when it comes to our hard-earned money, don't we all? These trends will soon be standard in banks and financial institutions. RPA and Blockchain will automate traditional processes behind the scenes with high efficiency and integrity, while Neobanks and Open Banking will provide ease of access and comfort.
 
After all, any service business aims to keep their customers satisfied by adapting to their needs and using these 5 Fintech trends, the FinTech industry would do just that!
 
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Tags:

Fintech Trends Fintech Trends 2021 Fintech Industry Trends Fintech Technology Trends Finance Technology Trends Fintech Trends For 2021 Banking And Finance Trends Digital Banks Neobanks Open-Banking Robotic Process Automation (RPA) Blockchain

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