The banktech and payments sectors underwent significant transformations in 2020 with the movement toward digital, contactless transactions taking center stage. But what can we expect out of the banktech and payments industries in 2021? FinLedger talked to a few industry insiders to get their thoughts.
Steve Smith, CEO of Finicity. As the country looks to 2021 with hopes for an economic recovery, strong consumer credit will be one of the last steps in this recovery… I expect that we’ll see credit scores decline later in 2021.
Junta Nakai, global industry leader for financial services, Databricks.
Open banking is going to do what open source did to software. Open banking is quickly becoming law across major markets around the world. … open banking represents a significant paradigm shift for banks. At its core, open banking is about data ownership. It forces incumbent institutions to open up access to customer data to third-party developers. Banks will be forced to move from a historically “closed” model, to an “open” model where customer data now belongs to the customer and thus data can be moved across institutions.
Simon Wu, investment director, Cathay Innovation… Similar to how trading commissions disappeared overnight, traditional banks will need to modernize to stay relevant with the rise of fintech. Incumbent banks will increasingly look to find ways to incorporate themselves into this new wave of finance by leveraging their brand and distribution to form partnerships.
Chuck Huang, founder & CEO of mobile payments company Citcon… While all forms of contactless payments saw a bump in growth, QR codes accelerated especially quickly for brands looking for a long-term, cost-effective and versatile solution. We’ll continue to see this growth in 2021, especially in virtual shopping environments…
Eliot Buchanan, CEO and co-founder at Plastiq. Payments-as-a-service has become the norm. AI-driven payment intelligence is making payments easier than ever before for businesses. Using a combination of data science and pattern recognition, these smart products can now recommend how best to make a payment (ACH, credit card, etc.) based on the payment type and amount of cash a business has on hand… Businesses will remain with their banks for core banking, but will move to fintechs for other services. No fintech company has been able to replace a bank as a trusted, secure place to store their money, but the increased credibility and awareness of fintech solutions has helped businesses become more comfortable using them for other services, such as making payments or securing loans.