Fintech Tools that Forever Shaped Society in 2020
As we finish out the first week of 2021, the desire to put all memories of 2020 in a box and fling it out of the stratosphere is tempting to say the least. However, despite the negativity, frustration, and economic instability brought on by last year’s mass shutdowns, the emergence of fintech tools and their integration into mainstream society paved the way for positive change.
KCD PR identified the hottest fintech trends that emerged from 2020 and will continue to be valuable assets in 2021 for managing our finances.
Stock Trading Apps Demystified Wall Street
While stock trading apps have been around for several years, 2020 made them mainstream.
Mass layoffs in industries previously considered stable – personal wellness and hospitality, to name a few – coupled with more time spent at home set the perfect stage for platforms like Robinhood and TD Ameritrade to thrive. Robinhood in particular made a name for itself by simplifying the stock trading process and increasing its accessibility for young investors with lower investment principals. TD Ameritrade’s easy to use and commission-free platform also made it easier to become a better investor with a robust library of educational material.
Diversity and Inclusion Programs Got a Second Look
Another positive outcome of 2020 was the renewed attention to social justice reform and improving diversity and inclusion in financial institutions. The year brought greater awareness to economic and opportunistic challenges faced by the Black Indigenous People of Color (BIPOC) community and as a result, businesses like General Motors, Salesforce, and Citi are prioritizing diversity and inclusion initiatives. States such as California even went as far as creating new laws that require corporate banks to include board members from underrepresented communities.
This push for a more inclusive financial system also paved the way for the rise of neobanks – banks operating exclusively online without traditional physical branch networks. Across the world, neobanks have enabled previously underrepresented people to access financial services and loans with more flexible terms than their traditional banking counterparts. In the Venture Capital world, neobanks led the charge of the $3.6 billion in venture capital funding.
Payment Options Went Contactless
As cases of Covid-19 rose across the U.S., so did social distancing and safety guidelines. In an effort to curb viral transmission, contactless payments spiked in popularity. Even merchants previously resistant to mobile payments changed their tune. While this change was quickly welcomed and adopted by consumers, other B2B industries had a more difficult time making a swift transition to contactless payments. Mobile payments company Comdata stepped in to ease the transition for essential workers in the trucking industry to continue operations and keep the supply chain afloat.
According to Comdata Senior Vice President and Head of Product Justin King, “By providing end-users and payers with the supportive resources to implement these changes effectively, technology companies can do their part to help establish financially sustainable supply chains for years to come.” The reality is, 2020 pushed every industry out of its comfort zone in some way, including in digital adoption. This year, we’re likely to see more companies invest in digital transformation.
Cryptocurrencies Stole the Spotlight
In the push for a cashless society and more contactless payment options, cryptocurrencies reemerged with a vengeance, climbing past $20,000 in value. Additionally, the rise of cryptocurrency was propelled by top fintech players adding capabilities to support the trading of cryptocurrencies. In 2020, Paypal announced that users in the U.S. would be able to buy, sell and hold select cryptocurrencies directly through PayPal using their Cash or Cash Plus account. Additionally, the platform provided educational material so that users would be able to learn about Crypto and track crypto prices, all without leaving the PayPal app.
Cryptocurrency expert and CEO of Noble Gold Investments Collin Plume says, “For good and ill, in the foreseeable future, Bitcoin will be the standard-bearer for cryptos and the marker by which all the others are valued.” In 2021, Bitcoin will be heavily monitored by experts and used as a benchmark for the potential launch of more cryptocurrency services.
So, what do all of these trends mean for emerging fintech companies?
Simply put, it’s fintech’s moment to shine. The industry is moving faster than ever, attracting new funding, merging with more established financial institutions, and paving a new way forward for consumers and B2B. For new fintech startups, the key to standing out in a market that will soon become more crowded will be understanding where your company stands against competitors and leveraging that data to clearly communicate your company’s unique value to key audiences.