2020 has not been a year to confidently rely on market trends and draw inferences from them. What portion of a trend is driven by the pandemic and what is based on solid data, there’s no way to tell for sure. However, in the financial services market, we have enough data moving in certain directions to see some definitive patterns.
Big Tech and financial services partnerships, innovation at the banking level, a renewed appreciation for consumer intelligence, robust AI helping in detecting fraud and other forms of cybersecurity, and an increasingly cashless economy are some of the most prominent financial business trends for 2021.
If you are planning to launch, modify, or expand your financial business in the next year, continue reading to find out which way will the market go during the next 12 months.
1. The Meteoric Pace of Digital Growth
The financial sector has, finally, fully realized the need to become digital. The efficiency and convenience that come with digital banking solutions already made a compelling case for it, but it is due to the current health pandemic that we have all seen how critical it is for a financial institution to have a robust digital presence.
As more people and businesses opted for online payments, we saw an unprecedented surge of incoming traffic on different digital banking channels. This trend is expected to be mirrored at the corporate banking level, too. As companies become more technology-reliant, they will look for financial solutions that are more flexible and agile.
To ride this wave of digital growth, invest in the digitization of your financial service more proactively. Hire people who bring a technology skill subset to the table, allocate a separate portion of the budget to ensure efficient digital advancement, and invest in robust data and analytics. Without the last leg to stand on, your digital growth strategy will remain severely lacking.
To distinguish your digital finance platform from the rest of your business operations, consider launching it as a separate brand with a unique accounting and CPA logo design and all. The move will help your customers look at the brand with more favor and as a niche and focused service.
2. New and Emerging Fin-tech
With the full might of technology at its disposal, the fin-tech industry is enjoying its day in the sun. And the sunny day seems to be going on forever, which is good news for all of us. As the delivery of financial services becomes more tailored and intuitive, we all benefit. Taking advantage of emerging technologies such as blockchain, cryptocurrencies, and big data, the fin-tech industry is enthusiastic in its commitment to provide insightful, flexible, and convenient financial products with simplicity and reliability.
If you are a finance service startup, your chances of getting funding may be brighter if your focus is technologies like blockchain. Investors are also looking at entrepreneurs who have a vision of moving from retail and consumer banking to larger financial sectors.
The great thing about a fin-tech startup is you do not need to offer solutions to every banking/financial problem. Think of a specific issue that you can address creatively and create your fin-tech around it.
3. Cyber Security & Big Data
We keep talking about the role of technology in providing proactive and creative solutions to different financial and banking needs. But without a robust cybersecurity system in place, this can all go down in flames.
As reliance on technology becomes a norm for the financial sector, security will play a key role in determining which platform has the larger market share, the more loyal customers, and the market trust to innovate big. Sophisticated cybersecurity systems in place will also ensure an improved customer experience as well as a more flexible digital banking infrastructure.
Additionally, data and analytics are also going to be dominant topics for 2021 and beyond. The more a financial institution drives to incorporate change, the more data it’ll need to make informed decisions. Professionals with data and analytics skills who can manage their company’s market analysis needs will be in high demand, and will need to have their finger on the market pulse at all times. Actionable insights will drive growth for any financial services organization.
Some Parting Thoughts
Technology is the singular trend underlining the major ways the finance industry is changing. Whether you are a technology firm exploring financial waters or a finance service navigating the foreign jungle of tech, one thing is certain: finance and tech can’t do without each other. Tech needs fast and smart monetary products to keep up with its pace and finance needs tech to keep delivering to its consumers.
No matter which side of the field you belong to, you can make some really smart business moves by merging these two sectors of the market and offering something innovative to the public in 2021.