There’s an ancient Chinese proverb that says, “When the winds of change blow, some people build walls and others build windmills.“

The winds of change blew in 2020, politically, socially, and economically. It brought about the greatest period of turmoil since the global financial crisis — the event laid the foundation, directly and indirectly, for much of what we now call fintech.

How will the changing winds of 2020 shift the direction of fintech in 2021? We asked six executives from across the fintech ecosystem for what they think will be the biggest developments for fintech in 2021.

Kathryn Petralia, co-founder of Kabbage

The big idea: Fintechs will be a primary support for small businesses’ recovery.

“Expect the spike of adoption for digital payments and online-only bank accounts from fintechs to flourish as businesses choose digital, not traditional, solutions to better manage their cash flow after a challenging year. As such, keep a watchful eye on the commoditization of traditional banking services as fintech-fueled experiences become the de facto face of money management.”

Phillip Rosen, CEO, Even Financial

The big idea: Digitization is coming for the insurance industry.

“The pandemic has served as a digitization-forcing event for the life insurance industry and we will see that trend continue to accelerate in 2021 as consumers demand it, data enables it, and insurance companies recognize efficiencies from it. For example, we’re seeing more life insurance carriers offer the ability to be instantly approved without the need for a physical exam or medical records.

“More broadly in insurance, we’re seeing companies from a diverse set of sectors start to offer financial products and services to their customers and this trend will increasingly expand to ‘embedded insurance’ offerings in 2021. Consumers are used to being offered trip insurance when purchasing flights or extended warranties when purchasing tech products. Look for a range of companies such as automobile manufacturers to real estate brokerages — really any company that sells something that can be insured — to begin to further monetize their data and customer base through insurance products, all enabled by insurtech solutions and partnerships.”

Josh Cyphers, president of Nvoicepay

The big idea: More companies will adopt automated payments.

“The adoption of payables automation is a major trend, with a potential for growth in 2021. The remote work restrictions that many companies complied with at the beginning of the year guided the realization that success isn’t always the result of in-office attendance. Some larger businesses have already begun the process of becoming remote, and we will likely see more in the future. The businesses that have yet to take the plunge will begin seeking ways to automate their processes and improve their employee’s work experiences.

“Cash management is king. Companies are looking at the timing of payments, extending payment terms to suppliers, or delaying payments. Payment automation providers have become more sensitive to that over the years. We will likely see that sort of control being offered as a feature of remote payables.”

Benjamin Johnston, chief operating officer of Kapitus

The big idea: Both fintech lenders and regulators will step up.

“Fintech lenders will continue to expand access to capital by providing loans at increasingly affordable prices to a wider array of consumers and small businesses. As they do, they will take market share from traditionally regulated institutions such as banks.

“As fintechs experience rapid growth in 2021, regulators will feel increasingly compelled to expand their regulatory reach to include non-bank fintech lenders. The CFPB [Consumer Financial Protection Bureau] will regain some of its regulatory mandate, while the FTC will continue its focus on issues related to small business lending. State legislatures such as California in 2018 and New York in 2020 passed APR [annual percentage rate] disclosure laws and we can expect to see other states explore similar disclosure mandates.

“Regulation is a sign of a maturing industry that is establishing itself as a broadly desired and accepted purveyor of services.  As the fintech sector continues to gain acceptance and market share, additional regulation can be expected and will help establish minimum standards and build trust with its growing customer base.”

Naftali Harris, co-founder and CEO of SentiLink

The big idea: Tech companies will encroach on financial services.

“The distinction between “fin” and “tech” will increasingly blur as more technology companies embed financial features into their products, and traditional financial institutions embrace new technology. Consumers wish to transact with companies and brands that they trust, allowing technology companies an entry into financial services, and incumbents are realizing that they are losing market share to fast-moving tech companies that focus more heavily on the user experience and are learning from their mistakes.”

Billy Libby, CEO of Upper90

The big ideas: Fintech as a Service and more M&A.

“Embedded finance will be much more prevalent in 2021 and beyond. Just as Marc Andreessen previously said, ‘software is eating the world,’ we will be seeing a wide range of industries offering fintech as a Service (FAAS) to expand product stickiness.

“Data is the reason that embedded fintech exists, since all companies can now underwrite and extend tailored capital in smaller sizes cost effectively. With data you can predict which customers will be a good fit for these services, along with the ability to keep customers on your own platform, keeping customer acquisition costs in check, which is a key challenge for the fintech industry.

“I also predict there will be more acquisitions in the banking industry between traditional and online companies, especially as more SPAC’s [special purpose acquisition companies] enter the market which we see emerge as a trend vs a fad.”

This story originally appeared on Benzinga.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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