Top Fintech Trends to Watch in 2020

The financial technology (fintech) industry is one of the fastest-growing in the world. The number of fintech companies being started around the world has continued to rise. At the same time, the amount of money being given to these companies has grown to unimaginable levels. In 2018, investors poured more than $52 billion to fintech companies. Just two weeks ago, Visa acquired Plaid, one of the fastest-growing fintech companies in the world. In this article, we will look at the top fintech trends to watch in 2020.

Big companies to increase presence

A big trend to watch will be that big companies will continue to increase their presence in financial technology. We have already seen this happening. Last year, Apple launched its Apple Card product. In the same year, Google applied for a banking license while PayPal acquired Honey, a company that offers coupons. Data is the main reason for this. Companies want to have access to customer data with the goal of using it for other uses. For example, Google wants to have a better understanding of how people spend their money. Therefore, we will see more companies invest in the industry.

Online lending to increase

Another trend we will see is that of consumer lending. In the past few years, the amount of money that is being lent to people via their smartphones has increased. In the United States, companies like Lending Club and Prosper are leading the way. Internationally, companies like Tunaiku, Branch, and Tala have continued to increase their market share. This year, the amount that is lent to people will continue to increase. New technologies will also likely be introduced.

The year of blockchain

The blockchain technology has been continued to grow. In 2019, Bitcoin was among the best-performing asset. The same trend is happening this year as Bitcoin has already risen by more than 20%. This year, the theme will be about halving. Halving is a process in which the number of blocks that are awarded to miners will be halved. As such, the process of mining will be curtailed, which will lead to more people abandoning the mining. This will lead to scarcity, which may push the price of Bitcoin higher. Therefore, this year, we expect to see more investments pouring into blockchain.

Big data and AI in Fintech

Big data and artificial intelligence have been the biggest trends in the past few years. These technologies have helped power various aspects of fintech. For example, companies like Lending Club are powered by the use of this technology. It is able to predict whether a borrower will default or not. Therefore, the technology will be watched closely.

Consolidation

The fintech industry has not seen a lot of consolidation in the past. This could change this year as big companies increase their presence into the industry. It will not be shocking if we see a big company like Apple or Microsoft acquire another big fintech company.

Summary

The fintech industry has broken the previous barriers. It has helped reduce transaction costs when money is transferred. It has also made it easier for people to transact. Therefore, we believe that these will be the main trends to watch this year.

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