The Crystal Ball: What the experts expect for 2021

The Crystal Ball: What the experts expect for 2021

The Crystal Ball: What the experts expect for 2021

As per usual, at the end of each year, every industry is looking forward to figuring out what the future holds, trying to predict trends, and be the first to correctly forecast the developments. And the fintech sector is no stranger to this tradition. Researchers and academics have been pinpointing towards the disruptive role of technology and revolution of financial services (Goldstein, Jiang & Karolyi, 2019). Furthermore, with the support that the blockchain technology promises, new, exciting opportunities arise. For the US, a country with reported fintech penetration rates below the average, approximately 36% of all personal loans in 2017 were conducted by fintechs (Claessens et al., 2018), moving up from less than 1% in 2010. Two years ago, Alipay, a leading fintech company, processed over 1.05 billion transactions, in a single day, during the Global Shopping Festival. Governmental authorities are also jumping the bandwagon, with numerous countries introducing fintech projects and programmes specifically designed to facilitate financial transactions (Pollari & Ruddenklau, 2019). And what about now? ETH 2.0, AML6, WhatsApp Pay, Google Pay, Wirecard’s fraudulent activities, cloud migration, ETrades, and not to forget the primary head-line disruptor of 2020: Covid-19.

By analyzing current market trends, industry reports, exploring diverse and mixed expert voices from the industry, tackling the academic journals, and browsing through obscure internet information, we selected top predictions for 2021 from fintech. The list below might not contain anything new, but we believe that the featured trends will have an enormous impact on the fintech ecosystem altogether and relevant key parties.


Automated accounting processes. For next year, experts expect that automation will take a primary spot for accounting, due to the fact that it will eliminate completely any mistakes, confusion and errors. According to an ACCA Study, over 50% of C-level executives in the accounting industry expect the development of automated accounting systems.

Rise of accounting software solutions. With the development of new technological solutions, the demand for computerized accounting will only grow, leaving software companies to create robust products. 

Outsourcing. It is expected that businesses will start outsourcing accounting functions even more in the upcoming year, due to the fact that it provides numerous benefits, such as saving employment costs like payroll, taxation, salaries, benefits and training expenses. 

Cloud-based accounting. Cloud computing is on the rise, and the accounting field makes no exception in using this technology. With cloud-based accounting systems, companies and firms are able to have access to their system anytime. 

Data Analytics focus. With accountants taking on new responsibilities, such as advisors, data analytics becomes a prominent feature. Data visualization helps companies get better results, by providing them with unique insights that could be valuable when it comes to efficiently managing risks. 

Blockchain. Blockchain solutions are revolutionizing the accounting sector, by reducing the costs of reconciling and maintaining ledgers. With blockchain technology, accountants gain a more unobstructed view of their organization’s obligations and available resources.

Social Media. As main tools that social media provides, brand visibility, increased revenues and website traffic are among the top of the list. The power of social networking sites (SNSs) will expand in the upcoming year, and is expected to contribute greatly to monitoring competition and increasing profitability.

Advisory Service. Although technology is generating benefits, the upper hand will always go to the human professional and experts. Thus, a full automation is not to be expected viewed as a future trend, but rather a hybrid approach that combines both technological advice and human consultation. 

Asset Management

Managing the return to the workplace, preserving the culture, and creating a diverse workforce. Investment firms faced real difficulties keeping their people equipped to meet these expectations as they were simultaneously protecting their well-being in the face of the pandemic. Employee safety is the primary concern of investment management firms as they work to meet or exceed customer expectations.

Focus on Managing finances. Firms found that their planning for long-tail events proved to be valuable, even though they simultaneously were regarded as being insufficient for the rapid disruption created by the virus. The value came from knowing how to tackle a major problem and make decisions in the face of adversity and uncertainty. 

Controlling operational change and meeting customer demands digitally. Digital transformation will likely also become an element in many investment management firms’ brands. Investors may judge investment management firms based on their technological capabilities and adoption rates, which will translate into better services and better opportunities for them to invest.

Capital Markets

New platforms are the focus. Expert Saar Menachemi, VP of Marketing and Business Development at DealCloud, emphasizes research results on how capital markets will be all about new platforms. In the analysis, 70% of investors said new platform investments are their primary focus over the next six months, compared to 35% six months ago.

Fewer investors expect valuations to decline further. Only 35% of respondents said they expect valuations to decline, down from 93% in April.

The pandemic continues to impact the work environment. 47% of private equity firms have plans to return to the office, and only 40% have plans to resume business development travel, as technology-driven operations are seen by many as a bare minimum to remain competitive and cultivate key relationships.

Navigating the New Market. Experts expect that the overall tech sector will continue to play a leading role longer term, while in the shorter term, some broadening of the market is inevitable; separately, investors may want to consider hedging their portfolios accordingly.

Pivoting the Business. An acceleration of productivity at the cost of labor market growth is also predicted. Consolidation is likely to happen in finance, retail, and some areas of technology, with corporate real estate footprints shifting from urban to suburban environments.


Evolution of the Customer Journey. Tom Rich, Business Consultant at BJSS, sees for 2021 a growing trend across many industries in terms of personalisation of services. The financial sector can make use of the huge volumes of data collected to offer products and features that are tailored to an individual’s needs.

Collaboration over Competition. With the strong partnerships between banks and fintechs that are starting to become the norm, the financial industry is expected to see new products created out of these collaborations. 

Neobanks. This year has been a struggling one for neobanks, and most likely 2021 will bring further obstacles ahead. With Monzo and Revolut, two of the most established in the UK, seeing losses and redundancies, the road to profitability will most likely be pushed into the distant future. 

The Digital Currency Debate. 2021 is likely to be full of policies and technical analysis’s, and perhaps even pilot studies as central banks grapple with the designs and consequences of such a drastic shift to the monetary landscape. 

Autonomous finance. More AI & ML powered technologies are expected to be in charge of managing users’ money. Such applications algorithmically evaluate the available options and assist users in leveraging the most advantageous ones.

Biometric security systems. Biometrics has proved to be a successful solution into bringing security to the next level, providing users with the confidence that their data is protected. Contactless solutions are going to take over the touch-based fingerprint reader market.

Solutions to support financial literacy. Financial education is another buzz term of the year. Since research shows that many individuals are having trouble in managing their finance, 2021 is expected to bring new apps and helpers that could educate consumers on how to spend their money wisely, save more without trimming one’s sails and cutting costs to the bone, and invest in such a way so that to make a profit from it.

Identity Solutions

Growing adoption of digital strategies drives demand for CIAM. A new focus on how to drive demand for high-performance, cost-effective CIAM solutions is expected, as businesses seek to focus on their core strengths rather than developing proprietary systems on their own.

Providing customers control over their data is key. Another expected trend is to give the end-user more freedom to update and review their privacy preferences, such as using different emails for different activities, changing associated profile information, and being able to adjust their security profiles by configuring recovery mechanisms and registering trusted devices for login. 

IAM & Single Sign-on (SSO) Systems. The use of SSO systems is only expected to rise, with multi-factor authentication being one of the popular trends that can take over the global IAM market.

Blockchain in IAM & Biometrics. Blockchain’s potentials will further be explored in the next year, with more organizations seeing the advantages, such as transparency, reliability, robustness, and integrity. Moreover, biometrics authentication is expected to be an alternative to password authentication, due to the increased cyber attacks during the pandemic period. 


Data-driven insurance & privacy concerns. Throughout 2021, insurers will be incorporating new data points into their risk assessment and premium calculations. This data – which can be gathered from Internet of Things (IoT)  devices.

Product development may shake up status quo. New types of coverage may be spurred in part by the pandemic, such as the launch of more parametric policies. Insurers also may have opportunities to innovate more in personal lines with the pandemic-induced change in driving habits and work environments.

Cloud computing.  As insurers rely more heavily on new technologies, cloud services will be more essential than ever before. SaaS cloud technology can be used with an agile IT model to deliver new applications and software which brokers will need to make the most of big data and to engage with customers in 2021’s tech-driven market.

Remote services. Breaking down geographical barriers that can sometimes prevent the best talent from migrating into the insurance sector, remote working technology offers employees the flexibility and convenience needed to drive fresh innovation in the industry. 

Increased incumbent-insurtech collaboration. Incumbents and insurtechs are sometimes portrayed as being in competition with each other, the former for its established presence and legacy and the latter for its industry redefining technology. Breaking down these boundaries and combining the best of both worlds could see businesses and consumers profit in equal measure.

Cybersecurity. Cybersecurity remains a concern in 2021, and hopefully this year we’ll see more companies addressing the issue of cybersecurity and acknowledging and implementing new solutions, such as blockchain technology to create smart contracts which are self-executing.


End-to-end digitization. Loan approval is one of the biggest bottlenecks in the lending business. The process used by the lender or the underwriter can be error-prone. Digital lending software provides an automated solution for the entire team.

Switch to integrative microservices. The latest trend is cloud-based microservices. Companies can add these services as modules one by one. This system allows businesses to adapt to regulatory changes too.

Improved credit scoring systems. MEs often do not get access to credit because of this system. Some issues include extensive documentation, high-interest rates, and long decision-making times. Fintechs are providing an alternative scoring system and are expected to further facilitate the lending industry in 2021.

ML & AI. ML and AI can help in checking for frauds, credit scoring, and automated loan offer generation.

Increased availability of small ticket loans. The trend of fintech lending companies offering “buy now pay later” loans is expected to be on the rise next year. Consumers can get a product they want without having to fill out an extensive form. 

Self-service and omnichannel capabilities. Digital lending is expected to improve omnichannel communications. Customers will be able to communicate using the website, the app, text messages, or even social media platforms. Self-serve portals make lending businesses much more customer-centric.


Mortgage rates will edge up. With mortgage rates having fallen to new lows, an improvement is expected in the future as the economy improves and the coronavirus pandemic fades. Thus, rates will trend up, housing economists say.

Homes will go to well-off buyers. The National Association of Realtors (NAR) expects home price gains of 3 percent in 2021. The sharp rise in home prices this year has created renewed fears of a tightening squeeze on affordability.

Suburbs may grow at cities’ expense. In the early days of the pandemic, buyers gravitated toward suburbs. Liu, the Genworth economist, mentions that “the pandemic has made it possible for a surprisingly large segment to move from high-cost areas to places with lower costs because you can work from home and you don’t have to commute to the office five days a week.”

Ability-to-repay rule may be revised. The Consumer Financial Protection Bureau has proposed scrapping debt-to-income limits in favor of a ceiling on annual percentage rate, or APR. The theory behind the proposal is that lenders will charge higher interest rates to riskier borrowers. The proposal assumes that lenders are capable of assessing risk accurately.


PaaS traction among small- & mid-tier institutions. Payment-as-a-Service (PaaS) is becoming the option of choice for cost-effectiveness and go-to-market speed as bespoke payment technology stacks struggle to accommodate dynamic regulatory and technology updates.

Super-apps. The shift from single- to multi-purpose apps is cascading globally – even for players outside APAC – thanks to their power to create a seamless, integrated, contextualized, and efficient experience. 

Turning to DLT. Federated digital identity and currencies reap socio-economic benefits from Distributed Ledger Technology (DLT), a cross-border payments enabler.

Digital ID. Digital ID is becoming an invisible payments enabler for retailers. Payments are now part of the retailers’ ecosystem, and digital ID offers shoppers seamlessness and end-to-end value. 

Alternative payments. Covid-19 is fast-tracking alternative payments adoption. Demand and preferences for digital payments were already high, and now Covid-19 is prompting demand for more speed, convenience, and superior CX.

Stronger regulations. Regulators beef up scrutiny of new players and offerings as the ecosystem evolved. With the entry of new payment players and diverse offerings, the industry will become more complex, requiring regulators’ attention to balance the growing market landscape.

Regional payment schemes. Evolving regional payment schemes are poised to challenge the powerhouse status quo. As regional payment schemes gain ground, they may unify the fragmented landscape and compete with the majors and Big Techs.


A shift to Life Rights purchase model. The financial impact of Covid-19 has spurred interest in the flexible Life Rights purchase model. This allows investors to enjoy exclusive use of the unit purchased for the rest of their lives, at a reduced price. 

Online consultations. Rather than risking health by visiting medical centres for routine checks, retirees are opting for video consultations with medical professionals which will, undoubtedly, continue to develop in the future.

Smart homes. Retirees are taking this even further by interconnecting all devices and creating ‘smart homes’ that make everyday living that much easier. To harness the power of smart living, retirement estates are installing fibre optic cabling and ensuring all homes have fast Wi-Fi access.

Holistic wellness. Rather than tackling problems traditionally associated with old age, estates are supporting an active and engaged ‘care first’ lifestyle to enhance personal health.

The ‘smart sizing’ lifestyle. Retirees are looking at ‘smart sizing’, by simplifying and designing living spaces centred on lifestyle. This generally means more open plan living, garden spaces and less clutter.

PFM (Personal Finance Management)

Growing dependency on the Internet. One of the key drivers of this market is the increased use of the Internet for day-to-day activities and critical operations. People tend to post personal information on the Internet and companies are offering storage services on the cloud, which is leading to the storage of critical information on the web

Need to track & manage income. Personal finance software helps in tracking and managing the income flow of an individual or of a small business. This has made handling financial details easy as it can track investments and every small transaction.

Optimized performance. Adopting personal finance softwares on web-based platforms by users will only increase, as mobile applications are able to ensure efficient operations across different areas of operation. With AI technology implementation within the fintech apps, PFM is expected to prosper in the upcoming years. End-users will be able to further experience a seamless financial journey on their devices, provided with customized offerings and products in order to help them manage their finances. 

AI. AI and robo-advisors are expected to be more dominant for the PFM sector in 2021. According to Allied Market Research, the global personal finance software market will reach $1,213 million by 2023 and will show an annual growth rate (CAGR) of 6.40% from 2017 through 2023.

User-friendly technology. More UX & UI design elements are expected to be incorporated into devices in order to provide customers with an easy to use app. Moreover, elements of gamification are on the rise for financial apps, in order to educate consumers.

Regulatory & Compliance

Optimization with AI-driven Chatbots. Automated interactions with customers and employees are among the significant digital transformation trends that continue to grow exponentially every year. 

Driving Efficiency & Compliance with RPA Tools. By leveraging the RPA tools list into compliance practices, organizations can benefit from the swift and error-free automation of various routine activities.

Adoption of Holistic GRC Solutions. As cyber threats evolve and become more sophisticated, effective risk management processes become business-critical. To address this challenge, organizations are actively adopting innovative governance, risk, and compliance (GRC) tools. 

Growing Demand for Remote Audits. Advanced information and communication technologies (ICT) have made remote audits feasible and practical. In a post-pandemic environment, remote auditing will consolidate its position as a strong trend, as it is flexible, effective, and reduces the time and costs.

Use of Biometrics. Biometric authentication or fingerprint scanning for financial transactions created a buzz after the data theft in 2015. Recent research shows that the biometric market size is growing, and over 2.6 billion biometric users will be in the payments market by 2023.


Open Banking. Beyond the traditional view of open banking, there is the potential for exciting new services with revenue opportunities. New banking solutions – with seamless customer experience at the front end and multiple interconnected providers in the background – will become the norms in the near future.

Use of data and AI for predictive personalization. The coming year will bring the next evolution of financial marketing, leveraging data and advanced analytics to provide predictive personalization. 

Cloud Computing. The acceptance and use of cloud computing will be considered by financial institutions of all sizes in the coming year because of increased investment in scalable and industry-specific capabilities by IBM and other providers.

Automation Becomes a Financial Imperative. Similar to the movement to cloud computing, the RPA trend is gaining momentum because of the influx of external providers who have leveraged lessons learned over time to provide scalable solutions at a reasonable cost to small and large organizations.

Investment in Privacy and Security. Cybersecurity and data privacy will become a unique selling proposition (USP) for many financial institutions and big tech organizations. In an interview with the Banking Transformed podcast, David Birch believes consumers will be the ultimate owners of their identities, but that financial institutions will be the place the identities are maintained.

The Battle For Small Business Moves Up (and Down) the Value Chain. According to Cornerstone’s study, small businesses spend more than $500 billion on accounting/ bookkeeping, invoicing, bill payment and payment acceptance services from third-party providers.


A general reduction of labour supply. Over the past four years, growth in labour supply was outpaced by demand, and in 2019 the unemployment rate declined further to 3.3%, resulting in severe tightness on the labour market. This trend is only expected to continue in 2021.

A rise in trade costs. Restrictions on international travel and increased border controls have raised international trade costs and prevented tradable services from being supplied or consumed.

Reductions in both demand and supply in sectors most affected by the containment measures. The reduction in demand was more concentrated in highly tradable durable manufacturing goods in the financial crisis than what is expected in the current crisis, which particularly affects non-tradable sectors


Emphasis on Cloud Security & AI. Cloud-based security threats, including misconfigured cloud storage, reduced visibility and control, incomplete data deletion, and vulnerable cloud-apps, will continue to disrupt businesses in the future ahead. AI is set to help under-resourced security teams to stay ahead of the threats.

Extended Detection and Response (XDR). The Extended Detection and Response (XDR) is set to gain momentum as they can automatically collect data from multiple endpoints and correlate them to facilitate faster threat detection and incident response.

Security Process Automation. Security automation tools eliminate repetitive security operations by automating them based on pre-established rules and procedures. Thus, the security tasks can be performed quickly, effectively and with fewer errors.

Rise of Enterprise-level CSOs. Organizations which implement cyber-physical systems are set to deploy enterprise-level Chief Security Officers (CSOs) to collaborate with multiple security-oriented silos that can bring physical security, IT security, OT security, product management security, and supply chain security into a centralized governance model.

Secure Access Service Edge (SASE). SASE technology enables organizations to robustly secure remote workforce and cloud applications by routing the network traffic through a cloud-based security stack.

Zero-Trust Network Access (ZTNA). According to Gartner, 80% of new digital business applications will be accessed through ZTNA by 2020, and 60% of enterprises will move from remote-access VPNs to ZTNA by 2023.

Wealth Management

Pandemic opens the eyes of digital transformation laggards. Covid-19 made the importance of digital channels and capabilities crystal clear, spurring wealth executives to prioritize digital transformation. 

Sustainable investing. While sustainable investing was gaining ground before Covid-19, the pandemic accelerated the trend further, forcing wealth management firms to build capabilities to cater to the rising demand. 

Technology driven hyper-personalization. Hyper-personalized offerings will help wealth management firms address evolving HNWI expectations and lock in high-potential customer segments at crucial transition points. 

Alternative data sources & real-time data. Alternative data sources are paving the way for the future of trading and investment analysis.

Innovative fee structures. In response to fee structure disruption spurred by FinTech innovations in the wealth management industry, big firms devise strategies to attract digitally savvy HNWIs – as margin and revenue pressures grow. 

Ecosystem collaboration. Wealth management firms are exploring Open X collaboration to boost capabilities, expand reach, and achieve cost efficiencies.

We hope that this piece has brought you an informative overview on what experts think the future of fintech looks like for 2021. Stay up to date with the fintech world, and check out the content we select on a weekly basis  – news, research, analysis & opinion, and funding rounds. 

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