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 Chris Babcock, Filippo Carlo Ucchino, Stephen Ehrlich, Laurent Charpentier and Anna Curzon on their 2021 thoughts, plus a look ahead to 2022. Will there be a Happy New Year? Read on…
Chris Babcock is the CEO of Apiture, a provider of digital banking solutions empowering banks and credit unions to accelerate their digital transformation. He said:
“2021 is likely to be another record year for digital adoption as consumers and businesses have grown increasingly comfortable transacting online. For the banks and credit unions Apiture serves, this year has been all about broadening their relationship with customers through digital channels while enhancing the customer experience. Open banking continues to enable financial institutions to take advantage of today’s fintech ecosystem, and banks and credit unions are embracing the opportunity to expand their digital offering with capabilities offered by innovative partners. Some examples include:
“Digital Account Opening: Financial institutions are providing customers with an easy way to create and fund new accounts — including deposits, loans, cards, and more — from any online or mobile device, within minutes, without ever visiting a branch location.
“Value-added Experiences: Banks and credit unions are delivering features that support customers’ financial health, such as credit score tools, budgeting features, and low balance alerts.
“Enhanced Support Tools: Community institutions are implementing more innovative in-application tools that marry digital and in-person support through online chat and video features as well as personalised messages. “
On the future, he said: “At Apiture, we expect several trends to impact our clients next year. Firstly, financial institutions will leverage customer data through AI-based applications to deliver personalised experiences to customers, including enhanced support experiences, greater fraud protection, and targeted sales and marketing offers. Data privacy will remain a hot topic, with institutions providing customers with increased transparency and control over how their data is shared.
“Through open banking and the use of APIs, financial institutions will expose banking services to partners to develop new products. This strategy will enable banks and credit unions to benefit from the growing number of embedded financial services that are emerging from nonbanks to meet the demand for holistic, seamless experiences.
“Growth of real-time payments will continue globally and will reach a tipping point in the US next year. Beyond payments, real-time capabilities will extend to alerts, analysis, and notices as the batch world is left behind.
“A final trend we are watching and discussing with clients is cryptocurrency, and the topic can be polarising. While many banks and credit unions will maintain a wait and see approach, a growing number of institutions will implement crypto trading solutions in 2022 — and others will look to actually hold crypto as an asset.”
Filippo Carlo Ucchino, the CEO of Investingoal said that “there’s no doubt that 2021 has been another year dominated by crypto.”
“The total cryptocurrency market cap is on its way to replicate the 300% increase from 2020 which was already gigantic. This November the total value has almost touched the 3 trillion dollar figure. Every crypto adoption calculation has seen its scoring skyrocket throughout 2021, especially in emerging economies.
“But it’s not only numbers and percentages. More and more crypto players are officially investing in the “real world.” A good example is in the world of football, with Socios.com sponsoring Inter Milan and Binance.com sponsoring Lazio, to name just a couple. We’ve also seen a 700 million dollar investment from Crypto.com to attach its name to the Staple Center of Los Angeles for the next 20 years and change its name to the Crypto.com Arena.
“Another example is eToro, one of the fintech giants in the online trading market that’s always been at the forefront of crypto evolution. In 2021, eToro increased its total crypto offering from 16 to more than 40 digital tokens.
“2022 might be the year for crypto ETFs. For many crypto advocates, crypto ETFs are the final door that will allow the flood of capital for investment purposes from financial institutions. This will of course skyrocket liquidity bringing the whole crypto sector up with it.
“This is something that has been in the making for the past 7 years. The first was the Winklevoss twins who filed an ETF proposal with the SEC for the first Bitcoin ETF, but it was rejected due to lack of liquidity and concerns about transparency and manipulation. Back then when the SEC explained its reasoning, the market cap was 800 billion dollars. It’s now almost 3 trillion.
“Moreover, Coinbase, one of the biggest crypto exchanges, has gone public, and Binance, another whale in the sector has declared its plan to go public as well. On top of this, in October 2021 we saw the first Crypto ETF, ProShares Bitcoin Strategy ETF, officially start trading, followed shortly after by a second one, the Valkyrie Bitcoin Fund. The SEC has already reported dozens of other applications in 2021.
“So in 2022, trillions of dollars are likely to arrive into the Crypto arena through ETFs – and we can expect the whole fintech industry to react.”
Stephen Ehrlich, CEO and Founder of Voyager, the Crypto brokerage, said:
“Throughout 2021, we saw a major mainstream shift towards cryptocurrencies as more and more people explore ways to incorporate crypto into their financial lives. In response, we saw the crypto industry explode with innovative products that can help people build real wealth, from crypto-backed rewards to NFTs. Crypto earned so much limelight this year that it also spurred more regulatory attention and discussion. What was once confusing to many is now coming up in our everyday conversations, and crypto is now regarded as the next big fintech disruptor. We think there’s a lot in store for crypto in the years to come.”
He continued: “2021 set the stage for crypto to truly disrupt our financial systems. This year, people began to learn more about crypto and start to understand its value. Now that it’s become much more mainstream, 2022 will be the year for crypto to see innovation in real-world use cases. People will regard it as more than just a store of value, so rather than just holding it in their accounts, people will use it as a form of currency for payments and utilise its technology to make transactions — from art to contracts to music.
“I think in the next year, we’ll see increasingly more people use crypto like cash and more businesses accept it as a form of payment. Beyond next year, crypto will become so intertwined in our everyday lives, we likely will not even be able to imagine our world without it.”
Laurent Charpentier, Chief Operations Officer & Chief Innovation Officer at Yooz Inc. believes digital transformation was a trend of the year.
He said: “In response to COVID, the top trend in 2021 in fintech, and accounts payable specifically, was digital transformation. Digital transformation is not a new term for those in fintech, and it doesn’t look to be going anywhere any time soon. Adopting digital transformation has been key to make anything and everything accessible without having to be in the office. This includes cloud-based software and platforms, automation, the use of smart technologies like OCR, smart data extraction, AI, and machine learning.
“Additionally, cyber security has gone hand in hand with these digital changes to ensure companies are able to operate not only efficiently and effectively remotely in a centralized platform but also securely and free from risk.
“Digital transformation is a trend and a buzzword that we will hear for years to come in the fintech space. What started out as a response to the pandemic, and a forced shift in the way many do business, has started to shift into the new future of the finance industry that is more automated and efficient and less manual and error-ridden.
“A prime example of this is in the trends we are seeing in SaaS and fintech companies’ plans for the coming years. Expanding automation and digitalisation even further to enable multi-national, multi-entity, multi-language, multi-currency companies to do more with the resources they have and create a truly efficient, centralised process is at the top of the to-do list for most businesses in 2022.
“In addition to creating a powerful centralized process, the elimination of manual tasks is a byproduct of this digital transformation. Everything from getting rid of paper invoices with each order and the need to cut physical checks and mail them to a vendor for payment, to reducing the human errors that are a part of manual data entry are all benefits finance departments will be looking to accomplish in the next year with digitally transforming the way they do business.”
Anna Curzon, Chief Product Officer, at Xero, said:
“We often see periods of economic downturn speed up the arrival of new trends, and in 2021, it was all about business digitisation. Over the last 12 months of lockdowns and restrictions, businesses that were more digitally enabled had better rates of survival.
“Xero’s aggregated and anonymised data of more than 300,000 small businesses showed that those using more business apps prior to the pandemic pivoted much faster to offer online services and were more resilient.
“Additionally, governments around the world mandated digitisation in different ways, such as Making Tax Digital in the UK and Single Touch Payroll in Australia.
The acceleration of digital transformation has driven other trends, such as the growth of new small businesses and industries — especially in areas like e-commerce. This includes an influx of tradespeople, freelancers and gig workers who have taken advantage of evolving market dynamics.
“In the US, a KPMG report estimated there was a 14% increase in the number of gig workers — expected to reach more than 50% by 2027. ‘How to start a business’ also had over 60k searches in the US each month. Business digitisation was always coming, but it truly arrived in 2021.”
On 2022, she said: “Digital is a must-have. If we want a resilient recovery, we need to help businesses become successful in a digital world. By 2024, three-quarters of start-ups will have a digital-first strategy. By 2026, three-quarters will significantly increase their IT spend. With more access to digital tools and growth in SMEs, the fintech environment is ripe for innovation, which will help fuel the recovery of economies. Problems will be redefined and radical solutions proposed in numbers we’ve never seen before.
“AI is also here to stay.AI’s role in augmenting our lives for the better is only going to become more prominent. This year, we’ve rolled out a number of AI tools, including Xero Analytics and a new predictions feature in bank reconciliation. I think we can expect to see a sharp rise in the number of business tools powered by AI, to help people reduce manual toil and plan for the future.
“Finally, young people will drive innovation. More than 50 million people around the world consider themselves creators. It’s become the fastest-growing type of small business, and hundreds of tools emerge every day in this space. But we’re only at the tip of the iceberg. We can expect more innovation in the months to come, as the next generation confidentially say ‘we’ll take it from here’.”
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.