What’s in store for financial services in 2021?
If there is anything that 2020 has taught us, it is the need for speed when it comes to the adaptation of services and their delivery. The world was changed overnight with the arrival of a virus that challenged and shook our daily lives to the core.
Across many sectors, organisations worked quickly to help provide services and solutions to support the changes people and businesses were having to make to adapt to new requirements. In particular, the payments and technology industries provided a lifeline not only across the corporate world, but for consumers too, making our day to day lives easier. As part of this progress, it meant that users were able to interact within the retail space in a safer manner through the use of contactless technologies that helped to prevent the spread of the virus. Here are my top predictions for what the rest of this year might have in store for the world of financial services and fintech.
Your marketing strategy will focus on Gen Z
Putting spare change and birthday money into a ceramic pot in the shape of a cute farm animal was no doubt one of the first financial management activities we are all likely familiar with. The days of the piggy bank are long gone for today’s youth, who now have real-time balanced application programming interfaces (APIs) to count their pennies for them. For Gen Z, it is customary for birthday money to arrive via bank transfer, and for different APIs to track and even prevent their spending.
As such, it’s the quirky add-ons, funky features and “cool factor” additions that will appeal to this generation who were practically born with a smart phone in their hands that will give your financial products an edge. Gen Z will swiftly become a main target market for financial services, so their expectations should be taken seriously. If you can turn it into a #instastory you can sell it – step aside Strength, Weakness, Opportunity, and Threat analysis (Swot) it’s time to ramp up the “likes”.
Fintech will wear green
This time last year, Australia was on fire, young climate activists were skipping school on Fridays, and people of all generations were taking to the streets with recycled banners to speak out for the planet.
The need for climate change was recognised more than ever before within every sphere, and the fintech sector was no different. Most of us complete at least one financial transaction everyday – if not several, (for those of us with a slight online shopping addiction!) – so it is only prudent to understand how our purchasing habits, investment choices and the cards we carry in our wallet, impact the only home we have.
It’s refreshing to see that climate change and environmental awareness are shifting their position in the world of finance. What was once just an obligatory tick-box exercise is now a central focus and driver behind companies’ strategies and product design. As with everything else that’s hip and trendy, there will no doubt be many more jumping onto the green band wagon this 2021. But don’t just take their word for it – do your homework to truly understand how your selected financial services provider contributes to environmental protection.
Compliance will continue to be the angel on the shoulder of every successful fintech
Whilst “product suitability” and “speed to market” are the words on every fintech’s lips, the long-term success, scalability, and resilience of newly launched ventures depend heavily on compliance. It’s not sexy stuff, and it certainly won’t be the source of the latest TikTok trend, but understanding the implementation and rigours of compliance will be well worth it.
One of the advantages of start-ups is that they usually have a big and resilient partner behind them with a strong understanding and knowledge of the “do’s and don’ts”. I have often been reminded of the importance of listening. So, my advice to you is to listen to the angel – invest a lot in your product and invest even more in your compliance.
Innovation will shift into sixth gear
The question I hear so often when speaking about new start-ups is: “does the world really need another challenger bank?”. Probably not. But do other sections of financial services (that we use less frequently but are still an important part of our interaction with money) need a fintech makeover? Absolutely, yes!
Imagine a world where pensions, mortgages, charitable donations, or early salary payments can be processed in a less tedious, paperwork-free way. 2021 will deliver innovation to the areas of financial wellbeing that we usually dread dealing with. Enhanced by open banking, new start-ups will bring users closer to their mortgage repayment plans, or provide a credit card facility free from the financial debt and anxiety that often accompanies them. Innovation will be shifting up a gear in this sector, so buckle up – it should be an exciting ride!
It’s about more than just loyalty stamps
As the UK, Europe, and wider world continue their battles with COVID-19, the High Streets will continue the battle for survival. Mobile payments and NFC technology are already ensuring a contact-free shopping experience for those who choose to venture out from the comfort of their homes, but the role of online shopping and e-gift cards will step up a notch also.
e-Gift cards to help with school meals or to say thank you to dedicated key workers will become available. Using a prepaid QR code they’ll be treated to free meals at the end of what must feel like an endless shift. Virtual high-fives and digital thanks will be a big theme throughout 2021.
No one knows exactly what the future holds, but one thing is for certain: fintech will be part of it.