One recent study predicted the fintech industry will grow a whopping 23.84% from 2019 to 2025. Such forecasted growth suggests that there must be something big happening in the fintech marketplace.
The end of the decade saw many analyst houses, big and small, come out with many predictions based on their research. Below is a roundup of the most common themes spotted in the analysts’ crystal balls.
From personalization to hyper-personalization
Many will have already experienced the power of personalization when watching YouTube videos, browsing an online store, and so on. Artificial intelligence and machine learning have played a massive role in personalization—though it is sometimes blunt in practice.
The advancement in big data technology is expected to turn personalization into hyper-personalization. The sheer amount of data held, especially by financial institutions, on customers' browsing and social behaviours means we can expect personalization on an unprecedented scale.
Traditional paycheck to a more flexible paycheck
Over 50% of employees in the US have trouble with a conventional paycheck-to-paycheck lifestyle. Money worries stress many employees in the last few days of the month as they wait desperately for payday. As a result, many are forced to take on credit that can charge excessive interest rates, sometimes as high as 400% APR.
The fintech industry is now trying to address these concerns with the introduction of Flexible Pay. It allows employees to get their wages for the work to date, whenever they need it. Earnin, a company that dedicated to enabling this flexible paycheck model, is now valued at $800 million.
It is not worth big financial institutions spending time and money on small, short-term loans for individuals and small businesses. They would rather outsource this to other parties, and fintech industry players capitalizing on this opportunity.
Peer-to-peer lending, based on mutual terms and conditions, already exists and is enjoying some success in the market. We can expect these services to grow in popularity, particularly in developing nations, from 2020.
Shifting the focus to the underserved
Over 1.7 billion people in developing and least-developed nations lack even basic financial services. Fintech startups are now shifting their attention from developed markets to these emerging markets. But it’s not only developing nations that need these services—in the US especially, gig economy and part-time workers are making much of their income from side hustles and are sending money abroad, often paying a hefty fee to do so.
Uber Money is one example of a way to help these workers. Using it, Uber drivers and other freelancers can now send their earnings abroad and pay minimal fees.
Fintech consulting is going to get more popular
Introducing a new product to the market carries a lot of risks. Launching the wrong product, targeting the wrong market, or getting the timing wrong, could be disastrous. Fintech consulting firms are expected to play a crucial role in finding the right opportunities that minimise the risk of losses, avoid common mistakes, and innovate more safely.
Do you want to learn more about analysts?
Industry analyst firms like Gartner, Forrester, Celent, and Aite are hugely influential across the financial technology industry. Where does this influence come from? Which other analyst firms influence financial institutions and fintech investors? How can marketing and communications professionals make better use of analyst insight?
Register your spot for our free webinar exploring these questions, on February 20, 2020. Click here to learn more about the upcoming webinar.