FinTech Closes Out 2020 Strong
We took some time off last week to enjoy the holidays with family — hopefully, everyone was able to do the same! Here’s our last post for the year:
Labeling 2020 as a rollercoaster year may be taking all the events from the past 12 months too lightly. The pandemic, election, international conflicts, and unrest at home made everyone demand to fast forward into 2021.
Before officially closing the book on 2020, let’s recap critical industry events and trends:
COVID reveals gaps for the unbanked and underbanked: Millions in the US don’t qualify for traditional bank accounts and weren’t able to receive much needed stimulus checks via direct deposit. Neobanks and challengers banks are changing this dynamic (“FinTech Aids the Unbanked”);
FinTech partner banks step up: Banks are still in the background of all fintech and banking apps, providing an opportunity for community and regional banks to grow their customer base and deposit share outside of their local footprint. We listed top banks and partnership earlier this year (“The Rise of FinTech Partner Banks”);
Deals everywhere for FinTech, including IPOs: The market was hot in early 2020 for acquisitions, which spread towards public offerings (most recently was Affirm’s announcement). We discussed the top deals from market makers (“Let’s Make a FinTech Deal”);
More Neobanks means more card offerings: As the neobank and challenger bank landscape becomes crowded, platforms seek differentiation through innovative card models with debit and credit card benefits (“It’s All in the Cards for FinTech”);
Legacy banks forced to shift and adapt post-COVID: The traditional bank branch model and dynamic was on its way out — 2020 gave it one final push. We covered pivoting towards a new branch experience and digital transformation challenges (“The Road Ends for the Bank Branch”, “The New Decade of Digital Transformation in Banking”);
Regulatory approvals boost FinTech: Regulation in the US started opening up to FinTech companies in banking, investment, and cryptocurrency sectors. From the first FinTech to become an independent bank to other charter approvals, we’re seeing regulatory frameworks embrace innovation in financial services (“Year of FinTech Bank Approvals”, “Regulators Open Up to FinTech”);
VC funding in FinTech bounces back: The initial impact of COVID weighed down the industry into a wait-and-see, especially for investors looking for indicators on its long-term impact. By Q3, VCs started back up with investment activity — most importantly for the Series A market (“VC Funding in FinTech Bounces Back”);
Industry giants made moves: As the year came to a close, well-known giants and institutions made direct moves in FinTech. Goldman Sachs with BaaS, JPMorgan Chase with international banking and blockchain (Onyx), and Stripe (“Industry Giants Making FinTech Moves in 2020”);
It’s tough to say where the industry goes in the next year. More FinTech-friendly regulation? Financial institutions responding back to innovation from emerging startups? Cryptocurrency (and record-highs for bitcoin) build for mainstream adoption?
What is clear is how deeply embedded FinTech continues to be in our daily lives and how the dynamic of payments and e-commerce is shifting toward banking. Non-financial companies are looking to expand customer relationships through deposit accounts, cards, and loans. Banks of all sizes and banking-as-a-service (BaaS) firms are all engaged to make this happen in 2021. It seems like everyone is throwing their name into FinTech — here at FinTechtris, we’ll continue to stay vigilant on all the players and business models over the next year.
Enjoyed the article? Please comment and share below.
Join our community @FinTechtris for industry content & insight (includes deep dives, and sector analysis). As a bonus for subscribers, access our ebook “US BaaS Guide” to get started in choosing a bank partner.
Signup for our weekly newsletter today —>
