2020 and Beyond – The New Generation of Digital Banks & FinTech’s
The new generation of Digital Banks and FinTech’s have become a trusted first choice for millions of people. Their ability to adapt quickly to shifts in consumer demand, using new technology and open data, has resulted in a significant shift away from traditional banking & payments organisations.
2019 was an uncertain year, with ongoing Brexit negotiations, a general election and plenty of discourse around the approaching IR35 legislation. It seems that many large organisations have only invested in critical or regulatory programmes and the lack of clarity surrounding IR35 has reduced the Limited company contracting market. In this respect, 2020 has shown more encouraging signs with a majority government delivering Brexit on the 31st of January and those companies that haven’t already done so, confirming IR35 policies.
The new generation of banking
The signs are positive from a FinTech, Payments and New Tech perspective. There has been a seismic shift from traditional banking & payments organisations to the new generation of Technology, Payments and Banking FinTech’s. The traditional challenger banks that utilise large legacy systems are being eclipsed by more nimble FinTech’s using flexible and advanced technology. The challenger banks are challengers no more.
The new generation of Digital Banks and FinTech’s have become a trusted first choice for millions of people and this pace of change amongst consumers will only accelerate as they enter new markets and sectors. These organisations have access to open data and modern technology to offer the consumer cheaper, faster and easier products and services to use. They are less constrained by bureaucracy and regulation. They have smaller overheads without archaic systems, allowing them to change products and services very quickly to take advantage of consumer shifts in the market.
We will continue to see the growth and transformation of the global payments sector with single product FinTech’s expanding their offering, large payments businesses reinventing themselves as FinTech’s, Asian organisations expanding into Europe and large global big data processors moving into the sector.
Technology to watch in 2020
- Cloud-Based Platforms
- Cyber Security / Information Risk
- Blockchain & Cryptocurrency
- Lending Platforms
- Artificial Intelligence, RPA & Machine Learning
- Data Driven Solutions
- Regulation Technology
- Open Banking / PSD2
- Instant Payments
Over the next decade, Blockchain Technology & Cryptocurrency will likely emerge from innovation hubs and pilot programmes into a new global standard, with organisations implementing new regulated infrastructure and technology to simplify problems. Global businesses will benefit from a single digital currency to reduce cost and provide an audit transaction trail while remaining secure and instant.
Activity within Large Private Equity and Venture Capital will continue to increase within the Payments and Financial Services sector, with the acquisition of global brands, transforming them into fast-moving ‘FinTech feel’ organisations and diversifying into new product lines or sectors. M&A activity will be significant with the fight for market position becoming ever fierce.
Early Stage Venture Capital organisations are appearing daily and are investing in platform based companies to build and develop. More interestingly, a new brand of Venture Capital has emerged, investing in the talent of people to create new business propositions to bring to market and solve modern life problems.
Looking ahead, I’m incredibly excited by the opportunities that are being created by the evolution of FinTech’s, Digital Banks and Payments businesses and the appetite of consumers to move to digital platforms.
psd’s Banking & Financial Services Search and Interim Practice has supported clients for over 20 years across Innovation, Transformation & Change, Technology, Risk, Finance, HR, Digital & Marketing, Sales and Operations functions.