From the Australian bushfires to a global pandemic, the events of 2020 were some of the most unprecedented of our lifetime. We never could have anticipated the current situation we’ve found ourselves in or its impact on business operations–especially when it comes to the financial sector. The events that have unfolded this year have brought about a rapid shift within the FinTech space and this transformation shows no signs of slowing down in 2021.
While we can never fully prepare for what a new year may bring, here’s what I predict the FinTech industry will look like in 2021 given its current state.
The pandemic will continue to impact payments.
Generally speaking, consumers across various industries were compelled to adopt virtual payment and e-commerce solutions during COVID-19. Many lag verticals, like service providers that have remained on traditional payment methods, have been slow to look at new payment modalities.
The COVID-19 pandemic forced different business types to digitize all aspects of their operations, including their payments.
This was not just to account for being physically separated from their customers, but also with the motivation of offering a faster, more affordable way of moving money.
Payments will still be impacted by the aftermath of COVID-19 in 2021. Digital payments will be more widespread and organizations will continue to operate under a virtual payment method, creating more flexibility for their customers. This baseline of faster, more streamlined and consumer friendly payment modalities is driven by consumer demand, and is here to stay.
FinTech will focus on the customer experience.
Currently, many FinTech solutions are fragmented in terms of how they address consumer demands. There’s been an explosion of creative solutions pushed into the marketplace in recent years but most customers still need to have multiple vendors, each requiring various technical lifts to integrate with a product. Given the fact that many FinTech entrepreneurs are super smart people solving very niche problems, this can lead to a disjointed customer experience as teams work with multiple vendors across multiple layers of the business. If it feels disjointed on the back-end, the user will feel it on the front-end.
In an effort to make FinTech more user friendly, the user interface will be a main priority for FinTech vendors looking to transform their solutions to meet modern demands. Tools will be easier for end users to implement and manage, which will allow teams to get up and running without a huge technical push.
There’s more synergy between payment providers.
The pandemic came so fast, many payment providers weren’t in a place to adapt quickly, so there was a continued emphasis on using traditional payment methods. However, that’s not all bad, since the standard website, ecommerce, plug-in technologies were all there to fill the immediate need. But now, more than ever, is a time for innovation.
I predict 2021 will have a continued emphasis on synergies between payment technologies and strategic partnerships, where different tech solutions work with each other to benefit the customer. When looking at all the various technologies that exist, there are entire FinTech ecosystems that, if combined, would create truly transformative industries and consumer experiences.
A new year provides new challenges and new opportunities for FinTech to evolve operations, create a better experience for users and usher in a new era of payments.
By preparing for these trends and embracing innovation, companies can thrive in even the most unforeseen situations of 2021.
Brady Harris is the Chief Executive Officer of Dwolla. With over 20 years of experience in the payments industry, he’s making programmable payments the standard for any industry. Prior to Dwolla, Harris was the President of Payscape, a nationwide FinTech/SaaS provider that offers dynamic payment solutions. At Payscape, he was a member of the senior executive team, overseeing more than 1,000 employees between 13 global offices. He played a key role in the merger between Payscape and Payroc.