To say that 2020 was a pivotal year in the development of digital banking and fintech more broadly would be an understatement.
This year witnessed the emergence of alternatives born out of necessity rather than as something in addition to traditional establishments and the shift couldn’t be more pronounced in everything from personal finance to business.
Six major global trends dominated fintech in 2020 and will likely set the tone for developments to come in the next few years.
We’ve identified these trends as well as their impact on the here and now as well as what it could mean down the road.
The rise of digital banking is an unstoppable force that is giving us all a brief preview of what the future of all business will be like. From fast, responsive applications to efficient, data-driven processes, digital banking’s advantages are too many to list and too much to ignore. As currency itself becomes also a digital phenomenon, fintech institutions such as digital-only banking service providers will have a huge advantage over their counterparts.
Cybersecurity and Data Protection
Because more processes are moving online, the importance of cybersecurity and protecting data cannot be understated. Not only can a data breach undermine consumer confidence, it can devastate an institution’s ability to move forward as a going concern. Because of the high-stakes nature of the digital world, cybersecurity investments and companies that specialize in it are expected to grow in number and scope over the coming years.
Making decisions using anything other than data will be seen as a huge folly in the near future. As more and more businesses move online they also gain levels of information about their customers that they never had before. While not all of this is actionable data, some of it is and it could give firms a competitive advantage and help them identify emerging markets and seize upon those opportunities as they arrive.
As banks move online, they need to scale their operations efficiently and quickly. One solution to this vexing problem is found in the use of AI-based technology for everything from customer service chatbots to marketing activities. The idea isn’t so much that people are being replaced with machines, as it is the fact that digital banks can grow at exponential rates requiring this kind of infrastructure to support.
Cryptocurrency and the Blockchain
Long derided as a fad, cryptocurrency has persevered and is likely to become a permanent fixture on the financial landscape for the foreseeable future. While confidence in cryptocurrency might still be a thing of debate, there is little doubt about the technology that powers it. Blockchain solutions are being studied for various kinds of applications, including more efficient contract execution and data protection software.
It is no surprise that giving consumers the ability to pay in the manner they want to, is becoming a high priority task for innovators in digital and traditional banks. Services no matter the field are all about convenience, time-efficiency and simplicity and this means one thing: constant improvements and innovations. The payment industry has to grapple with the rise of smartphones and portable technology and parallel to that keep up with the incorporation of novelties like cryptocurrencies or even the potential use of international currencies in the future.
On the horizon
As you may well know, Fintech startups are known for their abilityto pivot and adapt to the ever-growing, adapting, and changing businesslandscapes, which actually helps them turn the tide even in the face of acrisis, for their own benefit. For the long run. Some of them have createdproducts in response to the pandemic to support the most vulnerable andimpacted social groups. So here it lays on our thoughts on the business impact andthe potential market size those companies are sitting on.
One platform. Multiple banks.
Going back to the first point we touched in this article related to the digital banking solutions, it is now the right time to state that we at Monneo are able to unlock the choices and opportunities potential the eCommerce merchants make. One platform, multiple banks? What does it mean and how it is achieved? Through a single reliable Monneo interface, merchants can access virtual IBANs provided through a network of leading European banks that support incoming and outgoing international payments. We enable merchants to send and receive international B2B payments which turns out to be a main competitive advantage in the ever-evolving digital business world. Contact us now to learn more about Monneo or directly apply for your virtual IBAN on our official website.