It’s that time of the year folks: there is something about one year fading into the past that inspires people to create lists. And the only lists that are more ubiquitous this time of the year than backward-facing “best of …” rosters are those that look forward with bold predictions.
So, it is in that spirit that we offer the following five fintech-related predictions for 2021.
1. “All-Digital” Will Solidify the Bank/Fintech Kinship
Despite the recent introductions of at least three different COVID-19 immunizations, consumers will continue to find ways to digitize their day-to-day habits wherever possible. Meaning banking - as we once knew it - will continue to migrate to an all digital activity.
This means financial institutions (FIs) will continue to close branches and reduce staff and leave them scrambling to find technology that helps customers effectively manage their finances and bill payments. And, because the banking industry generally proceeds with caution when introducing new tech, many FIs will look to Fintech leaders to guide them through the maze of new software and cloud offerings. All of which means the bond between FIs and fintechs will only strengthen in the new year.
2. Consumers Will Embrace AI Banking
Just because there is a lot of hype surrounding artificial intelligence, doesn’t mean there isn’t a “there” there.
In the case of banking, AI offers the potential to be the next best thing to visiting a branch when it comes to making managing finances a more personalized experience. We’re already seeing AI being deployed to provide targeted, personalized banking support - especially in the area of bill pay. (For instance, right now it can assist in automatically showing consumers billers operating in their geographic locale.)
AI’s ability to power location recommendations and collaborative filtering will continue to wow consumers in 2021 with customizable results.
3. Large FIs and Fintechs Continue to Collaborate
Despite a myriad of regulatory challenges, there are many industry-changing partnerships already in the works between today’s financial services heavyweights and scrappy fintech startups. The larger entities realize that the path to winning over digitally-savvy consumers is paved with personalized bill pay and financial management apps that permit people to consolidate their banking needs in a centralized location.
This trend has been gaining speed for several years and we anticipate it will shift into overdrive in 2021.
4. Digital Banking Goes Multi-Generational
The stereotype is that Millennials, Gen Xers and Gen Zers love their apps while Boomers continue to cling to their checkbooks. Even if that were true (and we doubt it), that viewpoint will go out the window in 2021. Consumers embraced online banking in record numbers last year and that trend is not about to stop. And, as the popularity of digital banking continues to explode, Boomers will have no problem keeping pace with their younger counterparts as they search for the next “killer app” in financial management.
As the next 12 months will prove: elegant, easy-to-use banking is a multi-generational thing.
5. FI Success in 2021 = Emotional Connections to Customers
Those FIs that are successful in 2021 will be those that create enduring emotional connections with their customers. The global pandemic forced far too many consumers indoors last year and one of the few positive outcomes of that was it enabled many of them to fully explore the online banking channels. Now that FIs have gained a new wave of digital customers, it’s on them to make sure their online platforms offer optimal UX and UI to meet customer expectations.
Long story short: those FIs that create personalized online experiences for their newest wave of digital banking converts will be the ones celebrating the loudest a year from now.