4 Most Important FinTech Trends to Watch Out For in 2020
July 6, 2020
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The fintech industry is one of the most visibly disruptive sectors since it can dramatically impact everyday consumers as well as the business of all sizes. It’s also potentially a highly regulated sector, with governments and regulators well aware of the need to both protect consumers and businesses, and to provide a fair, competitive environment for industry players.
At the same time, governments don’t always agree on how exactly to regulate this rapidly changing industry. Coupled with intense competition from traditional, established banks and financial services providers, along with constant technological developments, this makes for a volatile, exciting sector to watch.
So what do 2020 and the coming decade have in store for fintech and traditional banking and financial services?
The growing push for a level playing field
The largest banks are products of consolidation starting in the 1980s, and they enjoy a dominant position to this day. In 2020 and onwards, fintech players could increasingly push for a level playing field to prevent banks from taking advantage of their size and market share to crush rather than compete fairly with new market entrants.
The banking sector could see governments introducing stricter regulatory measures to ensure a more equitable competitive environment for fintech players. Although these players are already starting to make inroads in terms of gaining market share, existing traditional players can still have significant leverage.
Examples such as preventing bank customers from sharing bank details with fintech competitors by warning them of a security risk highlight how traditional players could be potentially be depriving fintech newcomers of a level playing field.
The growing dominance of challenger banks and neobanks
Challenger banks are typically established institutions (usually specialists or midsize firms) seeking to compete with traditional banks. Neobanks, on the other hand, are usually newer, completely online or mobile providers.