As 2021 draws to a close, it’s safe to say that this year has been full of ups and downs. With the world very cautiously emerging from the global pandemic, one thing has remained constant: the innovation and growth the fintech industry continues to bring. While the year has been a whirlwind for most, the fintech sector has seen many challenges and opportunities that will no doubt continue into the next 12 months.
This December, The Fintech Times is asking industry leaders for their ‘View from the Top’ to gain an insight into the decisions behind the last 12 months. Today, we hear from Uldis Tēraudkalns, Samina Seth, Halsey Minor, Yair Nechmad and Yasmine Henna on their 2021 thoughts, plus a look ahead to 2022. Will there be a Happy New Year? Read on…
Uldis Tēraudkalns is the CEO of Nexpay, a Lithuanian fintech startup providing banking infrastructure for the digital assets industry.
He said: “We are starting to see the rise of the so-called Super Apps (an app that’s a card, a bank, allows for trading anything to anything, allows for borrowing, sometimes food delivery – literally everything and anything combined into one app). This trend has been big in Asia for a few years already, but 2021 saw Super Apps entering the West.
“2021 was also the first year that open banking has seriously been put on the map (Plaid, Tink, also Nordigen as open-source). We aren’t seeing an explosion of apps yet, but we are seeing op-eds from bank CEOs criticising open banking – this is a great sign that something is happening.
“Finally, Crypto has gone mainstream this year. Sports sponsorships, celebrity endorsements, major banks talking about decentralized projects and new teams looking into these markets. Historically, I think we will look back on 2021 as the year that crypto started to enter the popular consciousness.
“For 2022, we are seeing that open banking will become a serious competitor to card acquiring in online checkout. With the popularity of BNPL, it’s only a matter of time before developers and founders start to find a competitive advantage through the use of open banking data here.
“The Rise of banking as a service will also be a trend. More and more traditional consumer platforms will add financial functionality through BaaS. This will take many forms, but the fact that it is now so easy to integrate these functions, we will finally start to see businesses making good on the famous quote, “Everybody is a fintech.”
Samina Seth, co-founder of Walee.pk, an ecosystem that connects advertisers with social media content creators, said:
“The recurring lockdowns created by the pandemic, its mutations, and infection spikes meant that digitisation became a critical priority for businesses, regulators, and governments worldwide. We watched as incumbent financial institutions scrambled to rush out their digital-first products with Mashreq Bank succeeding in the MENA region while DBS Bank was the winner in the APAC region.
“The year 2021 was saturated with examples of exponential growth in digital adoption, including the demand for e-payments solutions and contactless banking services. With fears around leaving the house for shopping, apps such as Chikoo gave brick & mortar companies a chance to launch an online store within minutes while services such as bSecure.pk allowed businesses to speed the checkout process and half the abandon cart rate overnight. The time saved as a result, for the consumer, means that they are never going back to the way things were, with the exception of perhaps desiring the cinema experience for movie-goers.
“We watched the growth in investments towards fintechs, including partnerships with corporates to white label digital banking apps, and a rise in demand for technical talent for APIs services such as Integry.io for a better user experience.”
“Now that fintech has gone from being something in the background to be the industry that may have saved the world from the worst-case scenarios of the pandemic, we can clearly expect that M&As will be embraced in order to grow geographically and add new forms of value for enterprise and end consumers.
“With the help of our government affairs and lobbying team at Z2C Limited under Babar Khan Javed, we hope to see increasing attention from governments and regulators as to how the fintech space is evolving and how we can help support the changes. We also expect significant IPO activity in 2022 for the FinTech space, led by Stripe, Chime, Brex, Trustly, and Klarna to name a few.
“In Pakistan, we expect that proptech companies such as DAO Proptech and xState will change the landscape in fractional ownership and create a ripple effect that impacts all industries tied to real estate, propelling the need for the fintech space to do what it does best: improving the speed, efficiency, accuracy, and convenience of the financial services experience.”
Halsey Minor, Advisor and Co-founder, Public Mint, thinks that cryptocurrencies have been a hallmark of 2021.
He said: “The defining fintech trend of the year has been crypto adoption. Last year a major company integrating crypto was a novelty, now it’s a must-have. Visa and Mastercard both support crypto payments, with Visa even going as far as to buy an NFT. You can purchase crypto on both Venmo, PayPal, and CashApp. Exchanges like FTX and Crypto.com are big enough to buy the naming rights to NBA arenas and could challenge Robinhood as the go-to platforms for retail traders looking for the highest yield on their investment, but Robinhood is expanding its own crypto offerings.
“If you are involved in trading or payments and your platform doesn’t support crypto, you have fallen behind. This obviously isn’t the only major trend in fintech this year — buy now, pay later has taken off in popularity as well — but the move towards crypto that began in earnest this year is only going to grow and will revolutionise the fintech industry.
“Crypto adoption isn’t going to stop after this year, and I believe that next year we will see more fintech companies get involved in Decentralized Finance (DeFi). Public Mint has set itself apart from other payment apps by embracing DeFi, and we anticipate others following our example. DeFi allows us to offer 6-8% APY on whatever money our customers let us hold. People want their assets to appreciate. We’re seeing record levels of inflation across the world, and consumers are responding by looking to invest, rather than holding money in savings accounts.
“For any fintech that holds funds, providing a return on investment will be key, and a great way to diversify is integrating DeFi investment capabilities into your platform. The DeFi ecosystem continues to work out a lot of the flaws that plagued it originally, and it is getting ready to be embraced by mainstream fintech institutions.”
Yair Nechmad is the CEO and Chairman of the Board at Nayax. He said that “we’ve seen a continued rise in the use of cashless payments” over the last year.
He continued: “Over the past year, we’ve seen a continued rise in the use of cashless payments. Consumers have kept embracing the ease of paying via cashless methods—including tap and go cards, mobile wallets, and alternative ID methods like QR codes and fingerprints.
“The use of QR codes in the US was slow to be taken up by consumers, however, due to COVID, that has changed. People are now used to scanning and will be more likely to use QR codes for payments and other purposes, such as receipts, product info in-store, loyalty programs, and more. Additionally, we’ve observed an overall increase in unattended machines and unattended stores. With ongoing labour shortages and payroll expenses, businesses will continue to rely more on that the use of unattended machines/stores in their operations. Whether it’s semi-attended or 24/7 unattended, this gives companies the flexibility to remain open for longer hours or minimise the need for employees.
“On another note, vending machine technology continues to develop, increasing the type of products that can be sold in machines, which makes this an even more viable option.
“Over the coming year, we expect to see businesses look for way to improve the customer journey. For businesses that have both an online and offline presence, it will continue to be critical to close the loop in marketing expenditures and understand how marketing dollars are influencing sales. Moreover, omnichannel marketing become more important in the sales cycle.
“Nowadays, retailers’ need to connect all consumer touchpoints. Businesses will also need to find more innovative ways to encourage loyalty for repeat sales. This will be seen by businesses developing promotions and loyalty programs, as well as incorporating innovative programs with other partners. Furthermore, the importance of digital wallets and apps will continue as consumers become more comfortable using these payment methods.
“Lastly, to avoid liability for fraud, we anticipate that more businesses will continue the installation of EMV certified devices, enabling both EMV contactless and EMV contact transactions, whether by card or phone. These EMV terminals will be cloud-based and support the omnichannel management and consumers’ journeys.”
Yasmine Henna, CCO of Sympl, believes the use of fintech itself has been a trend this year.
“Fintech has revolutionised how people live every day, from how they pay their daily expenses up to what they aspire to get and their lifestyles.
“The pandemic served as rocket fuel for various innovations in the fintech space, and has widely affected consumer behaviour; since then, the use of fintech products has surged.
“A major element of the fintech industry that has gained a lot of traction in stores and online globally is buy now pay later, which inspired us to create Sympl, the first “save your money pay later” platform in Egypt.
“Buy now pay later, in addition to multiple other fintech products, are now heavily dependent on data for growth, cost savings, customer acquisition, retention, and most importantly to build robust credit-decision making engines. Data has become one of the main building blocks for any fintech product to thrive.
“In 2021, a boom in digital and contactless payments took place. In response to the pandemic-driven need to reduce face-to-face shopping, the progression of contactless payments has been the “choice of the customer”. Also, businesses offering embedded finance through integrating payments, loans, and insurance into their products and services are having a high-customer appeal; fintech products are now merely reshaping how people live.”
On the future, she said: “Fintech innovations, whether in financing or payments, are rapidly inflicting a change on consumer behaviour however, there is more change we’ll be seeing in the near future.
“Firstly, fintech has been lately highlighted within the framework of B2C, yet lots of businesses are now empowering their B2B platforms with tech to start offering products and services that actually better serve their business customers and also give their revenues a considerable boost.
“An example would be payment platforms which do not only aggregate multiple payment methods but also invest in lending to their business customers and offering different fintech services such as insurtech through scaling their technologies and the use of data.
“One of the new technologies that is expected to also disrupt the fintech landscape is the open banking technology, which empowers both B2C & B2B platforms to better improve their customer service/experience, acquire new customer segments, build positive cohorts, and most importantly create new revenue streams.
“Open banking enables a business, given its customer’s consent, to securely access the customer’s financial data through application programming interface “API”, and gather real-time data from multiple finance accounts. Hence, enhancing a business’s scoring model and its ability to better serve its customers.”
This article is part of our 2021 December series, View from the Top, to see others like it and our special edition from December 2020, please click here.