The fintech industry is continuously undergoing changes in a myriad of ways, ranging from new regulations and policies to the implementation of leading technologies, all in the cause of stabilizing the market and bringing more value to customers and companies alike. Now that 2020 is slowly making room for the new year, it’s important that we take a look at the most disruptive factors and trends that will shape the fintech sector in 2021, and possibly the years to follow.
Perhaps it will be the cryptocurrency world and the emerging altcoins like Facebook’s Libra that will influence the course of the fintech industry, or maybe cybersecurity will play a more important role than ever before in stabilizing the sector. Perhaps it’s both and many more, so let’s put all of that into perspective and take a closer look at the five important fintech trends you need to watch out for in 2021.
COVID-19 is shifting the perception of finance
The COVID-19 pandemic has brought significant change to almost every industry in the world, fintech included. However, the impact of the pandemic on the global financial sector is yet to be felt, and in 2021 we can expect to witness the first big signs of its global influence. There is no denying that the COVID-19 pandemic has caused abrupt economic changes around the world, but next year the focus will be on the altered perception of personal finance in the civil sector.
As the pandemic continues to rage on worldwide, people will increasingly be questioning their perception of financial stability, and what their financial priorities are. We can expect to see a greater shift towards alternative forms of finance as people start “preparing for the worst” in the case that they lose their jobs or if the local economy goes under. The alternatives include digital assets and cryptocurrencies, lending and financing, more stringent wealth management and long-term planning, and the like.
Peer-to-peer financial services are becoming more important
P2P financial services have been on the rise for years, driven by technological innovation and the need to make money available and accessible to more people around the world. Fintech companies specializing in P2P financial transactions are expected to grow and thrive in the new normal, and these services in general will become more important than ever before in 2021.
As technology and the pandemic continue to shape the fintech industry, P2P solutions and innovations will bring higher financial security and freedom to people around the world. These technologies will, of course, need to ensure stellar protection for online transactions to every user. What’s more, P2P platforms will increasingly venture into the realm of financing, making P2P lending a reality and providing access to finances to people in developing countries and beyond.
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The popularity of cryptocurrencies is on the rise
One of the industries that is expected to benefit the most from the pandemic and the aforementioned shift in the perception of money is the cryptocurrency realm. In fact, the adoption and further development of cryptocurrencies might be trend that dominates in 2021 and the years to come, especially now that bitcoin mining hardware along with cryptocurrency trading have become accessible to a global audience.
Trading and mining cryptos is becoming easier and more affordable, and it’s important to note that companies are increasingly adopting cryptocurrency transactions, making it easier for people to cash in on their rewards. With the substantial growth potential of digital currencies and the continuous investment of big businesses like Facebook and PayPal, it’s safe to say that the cryptocurrency industry is going to impact fintech in a big way in 2021.
Cybersecurity will be a top priority for fintech companies
Technological advancement brings many advantages to rising fintech businesses, but it can also generate security risks that hackers and scammers can try to exploit. Given the fact that the fintech industry deals with some of the most sensitive and most important information in the world, the need for higher cybersecurity becomes paramount.
Fintech companies will need to prioritize cybersecurity in 2021, and implement solutions like confidential computing, hardware and software firewalls, dedicated security systems, and AI-driven security solutions to keep sensitive business and customer data safe at all times.
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The need for robotic process automation (RPA)
Lastly, robotic process automation might not be a new concept, but it will play an increasingly-important role for fintech companies that are looking to get ahead in 2021. Currently, RPA is a big part of the fintech industry across many domains and applications, and in the years to come these AI-driven systems will be used for everything from predictive analytics to higher security, lowering customer effort and optimizing efficiency, and beyond. RPA is expected to take fintech companies forward and bring more value to the consumer through greater automation and more streamlined processes for all.
The fintech industry is influenced by a myriad of socio-economic fluctuations around the world, and it’s important to remember that this sector is constantly evolving. These trends can uncover what lies ahead for the fintech sector, and thus help you make better decisions whether you’re a business leader or a consumer.
