The outbreak of the Covid-19 pandemic makes 2020 a year that completely changes the business model in each industry, including fintech. Finance and banking experts have predicted the top 5 fintech trends that will change the landscape of this industry in 2021 in Sweden.foto: Austin Distel
The outbreak of the Covid-19 pandemic makes 2020 a year that completely changes the business model in each industry, including fintech. Finance and banking experts have predicted the top 5 fintech trends that will change the landscape of this industry in 2021 in Sweden.
1. A change in perception
Jackson Mueller, director of policy and government relations at Securrency, once stated that one of the most important trends in the fintech sector concerns how people view their financial lives.
Mueller explained that the pandemic had brought many activities worldwide to a halt, and many have to ask the question, "What is my financial alternative?" In other words, when there are job losses and when the economy collapses, then the concept of "money", as most of us have fundamentally changed, what will be the consequences?
Specifically, the longer this pandemic goes on, the easier people will find more and more easy ways to live with it. They will adjust their finances or find new alternatives such as lending, payments, wealth management, digital assets, etc. We have seen an increase in usage and levels of comfort with cashless alternatives. The pandemic has accelerated this change even further.
2. The growing popularity of cryptocurrencies
It can be said that cryptocurrencies are one of the areas that have benefited the most from the change in perception of the traditional financial ecosystem.
Ian Balina, founder and CEO of Token Metrics (a crypto research business that uses AI to build indexes, ratings, and price predictions for cryptocurrencies), expressed countries accepting and recognising cryptocurrencies as the most crucial development in the fintech sector in the coming year.
“The most important fintech trends in 2021 will be crypto,” said Balina. “We predict bitcoin to break through the previous all-time high and hit over $20k per Bitcoin. This will get the mainstream media attention bitcoin has not received since December 2017.”
3. P2P-based financial services will play a more important role than ever.
Several analysts have identified the growing popularity and importance of peer-to-peer (P2P) financial services. For example, Beni Hakak, managing director and co-founder of LiquidApps, said that “the rise of peer-to-peer technology is driving opportunity and empowering customers around the world.”
Hakak points explicitly to the role of P2P financial services platforms in developed countries because of their ability to give them a pathway into capital markets. “From P2P lending platforms to automated asset exchanges, distributed ledger technology has enabled a host of new applications and business models to evolve,” Hakak said.
In the cryptocurrency ecosystem, the emergence of P2P systems mainly refers to the increasing prominence of decentralized financial systems (DeFi) to provide services such as asset trading, lending and earning interest.
4. Institutionalizing Bitcoin as a "Corporate Treasury Tool"
In addition to a regular increase in interest in cryptocurrencies that seems likely to grow in 2021, Bitcoin's role in institutional investing seems to become increasingly important as we approach the new year. And the biggest fintech trend will be the growth of Bitcoin as the most sought-after collateral in the world and the growth of its deepening integration with the mainstream financial system.
The expanding adoption of Bitcoin as a corporate treasury tool and growing interest among institutional and retail investors and ‘Stablecoins’ are emerging as a driving force. In addition, the disruption in the payments space will bring bitcoin and, more broadly, crypto as an asset class into the mainstream by 2021.
This will drive the need for solutions to securely integrate this new asset class into the core infrastructure of financial companies to securely store and manage it like for any other asset class.
5. Continuing the 'Fintechization' of everything
Anti Danilevski of the KickEX exchange pointed to the continued "realization" of "everything and everyone - delivery, cloud storage..." he said. Indeed, this 'realization' has been underway for several years now. Financial services are everywhere: delivery apps, food ordering apps, corporate membership accounts, the list goes on and on.
Furthermore, this trend is not going to stop anytime soon. As the need for data grows stronger, having a direct line of access to users' personal finances has the potential to provide substantial new revenue streams, including highly sensitive (and highly valuable) personal data. However, companies need to be extremely careful before leaping into the fintech world.