From large financial services institutions like Mr. Cooper to disruptive financial technology startups like BlueVine and Credit Sesame, at Highwire we work with companies who are shaping the future of financial technology. We’re also in touch with journalists on a daily basis who cover everything in the financial commerce world, which gives us a unique perspective on the industry. While no one can say for sure what the future will bring, we do have some predictions for the coming year based on the latest trends and research.
As with all technology, fintech is evolving so fast that it can be hard to keep up. If you’re wondering what you can expect from fintech in 2020, here are our top four predictions:
- Banks, Banks, and More Banks
We’ve seen many tech startups launching banks in 2019, and this trend shows no sign of abating in 2020. With companies such as BlueVine working to power the next-generation of small business banking, it’s no wonder the booming fintech industry has been pegged as the ultimate bank “disruptor.” These startup banks tend to focus more on the consumer by giving them tools at the touch of a button, such as mobile credit cards. Big banks have even spent upwards of $8 million investing in digital technology, hoping to keep up with the small fintech banks in that regard. Expect to see new entrants with even more convenient features chipping away at big banks’ dominance.
- Open Banking is Coming
Just because the U.S. is not subject to PSD2 doesn’t mean that there’s not going to be a push from consumers for banks to provide easy access to their data – in an effort to maximize the value that they get from their banking companies. In fact, 94 percent of FinTechs are already considering how open banking can enhance their current services. Look out for new and innovative API-based services from both banks and fintech startups in the next few years on both sides of the pond, with more tools designed to benefit the customer.
- Loans: Can’t Stop, Won’t Stop
Americans’ insatiable demand for credit won’t slow down anytime soon. With fintech companies changing the way in which consumers access lending options, expect new loan products, as well as continued strong demand for existing products, in 2020 and beyond. The fact of the matter is, these fintech companies offer lending in a way that is different than what we’ve seen from big financial banks and institutions, including more perks and savings, alternative lending methods, and fast approvals with funds available sooner than later. Of course, all bets are off if there is any regulatory/legislative change to crimp demand.
- More Fintech and Bank Partnerships
With robust growth in the private sector for the better part of the last decade, some sectors of the fintech market fear a slowdown and possible downturn in 2020 – and how we would react to that. That said, the continued consumer distrust of the traditional financial services and banking industries will most likely continue, and the demand for new, innovative, more convenient, and consumer-friendly services will continue. Of course, most of those offerings are built in partnership with fintechs, so we’ll see them continue to partner up with banks in 2020.
What do you think? Will fintech thrive or dive in 2020? We’d love to hear your predictions. Leave your thoughts in our comments section below.