We had an amazing year in 2019. As we end the decade, our awesome team offers a glimpse into the future. We predict fintech trends for 2020.
Hydrogen Head of Product & Co-Founder
Based on conversations with current and prospective clients, partners, innovation labs, and industry veterans, here are the big trends I see emerging in 2020:
- Fintech in Latin America will explode with growth. 2019 saw billions of venture dollars flow into the coffers of “Neobanks” (digital banking startups) in Brazil and Mexico, the two most populous countries in Latam. Other markets to look out for include Colombia, Chile, and Argentina, with startups targeting underbanked or unbanked consumers that have largely grown distrustful of the traditional banking system. Hydrogen is already working throughout Latam and we will continue to invest heavily in this market in 2020.
- Commercial Banking products for SMBs and SMEs will no longer be a digital afterthought. While much of the last decade in fintech has seen banks spend billions digitally transforming their retail banking arms, SMBs have been largely ignored. This will change in 2020, with the addition of business financial management tools (BFM), fully digital invoicing, cash flow management, and accounts receivable tokenization. Look out for some exciting announcements in this space from Hydrogen in Q1 2020!
- Low and No Code platforms will augment fintech builds. With the growth of no code platforms, such as Squarespace for websites, and Canva for graphic design, non-technical employees have grown accustomed to building rich user experiences with drag and drop interfaces. Expect this trend to move into building financial applications. This will affect things like digitizing client onboarding and creating custom workflows. We have been busy adding Low and No Code components to our High Code platform for 2020!
- Everyone will become a financial services provider. 2019 saw fintechs of all stripes expand their product offerings into banking products, such as debit cards and high-yield savings. Thanks to the rise of Banking as a Service (BaaS), the old barriers to entry of cost, speed, and regulation have been dramatically decreased. This trend will continue. I foresee BaaS expanding to other industries, such as telecom, big tech, and retail. These companies have tens of millions of users, and are looking for ways to increase brand loyalty and revenues.
- B2B infrastructure startups will become more abundant and valuations will surpass those of their D2C brethren. “Picks and shovels” businesses such as Plaid and Stripe have grown to large valuations by providing the plumbing to consumer businesses. With the cost and ease of providing financial services plummeting (see #4), more D2C fintechs will become B2B providers, as the appetite for fintech infrastructure increases. Hydrogen is proud to be a pioneer in this market; we will continue to invest in the digital infrastructure needed to transform the financial lives of billions around the globe!
Additionally, we asked the rest of the team in various business units what they see emerging in 2020, here are their thoughts:
Naomi Teninini – Product Designer
- AI will become more and more influential and necessary in the fintech space.
- AR will start making its way into more consumer markets.
- Seamless integration between all financial areas of a person’s life will be synced and considered when informing them about their money. The less friction, the more adoption.
- People want to become more educated about their financial standing and best practices, so I expect more solutions to emerge here.
Nahom Yemane – Molecule Product
- We will see mainstream fintech companies begin to enter Africa, as well as make a strong push into Latin America, and Southeast Asia.
- We will see banks and investment firms exploring new technology and programs to compete with startups such as Robinhood, Coinbase, and M1 Finance.
- A plethora of new banks will expose their APIs, thanks to the open banking laws that went into effect over the past few years.
- The rise of digital cash, e-money, and government-issued stablecoins.
Kevin Sarpu – Customer Success
One big trend will be the digitization of pension systems around the world. Both public and private pension systems have existed since the mid 1800s. With that comes archaic infrastructure and processes. I believe there will be a push to digitize the following:
- Pension onboarding
- Pension fund comparisons
- Pension calculators
- Tax savings calculators
Scott Raspa – Growth
- Customer-centric/focused organizations will win. Simple, seamless, amazing user experiences are a must to attract new customers. These customers are willing to switch financial institutions if they don’t feel valued, thus, keeping them happy is critical to an organization’s growth and success.
- Making sense of disparate data will be critical to an organization’s success. If you can’t do the following things, you will be left in the dust:
- Having an open architecture
- Ability to aggregate various sources
- Being able to make sense of the data – perform quick, accurate calculations & analytics
- Security will play a huge role. Here are things to keep in mind:
- Managing partnerships and third-party vendors leveraging various technologies can be a challenge
- With mobile and other IoT devices, the attack surface increases, which can make it more difficult to protect/secure