What can we expect from 2020 fintech trends around the world?
It’s 2020 and the start of a new decade. And for the global fintech sector there is a definite shift from disruptive tech into the mainstream financial services sector. Fintech has moved into its next phase and is scaling across every sector and every region.
Fintech success stories are leaving behind their start-up roots, with many branching out into other regions and countries. Others are widening their offerings and working with established companies to deliver them. Each region is moving at a slightly different pace, with the focus on varying aspects of financial and personal services
For example, Europe’s flexible regulatory framework has allowed fintech companies to broaden their scope, while Africa’s unique challenges narrows the sector’s immediate focus to payment platforms. And while Africa is my main area of interest in business, it’s always useful to understand the fintech trends across the rest of the world.
Global fintech trends by region
1. Fintech trend: payment platforms Where? Africa and the Middle East
Figures from the World Bank show that at least 340 million adults living in Sub-Saharan Africa have no registered bank account. But an increasing number of them do have access to mobile devices with Internet. This is where fintech start-ups are hitting hardest.
By leveraging the mobile penetration across this region, start-ups are offering financial services without cumbersome sign up processes. Access to financial services is traditionally poor for millions of people, with sign up processes out of their reach. But fintech start-ups are offering payment platforms for users that don’t ask for bank account details, credit cards or minimum deposits.
Instead, they offer easy, secure access to payments online, and a range of personal and financial services of all kinds. This next-level payment platform can be seen with Nigerian start-up OPay. It’s a one-stop-shop platform that can be accessed by mobile devices, offering everything from transport to grocery delivery and a host of other everyday useful services.
2. Fintech trend: Banking as a Service (BaaS) Where? North America
In the US, an emerging group of fintech start-ups are offering bundles of programming functions that can be incorporated into other company’s apps or products to offer financial services as an extra.
This effectively can turn any company with the technological capability into a fintech company. An example can be seen with Bond, which is a start-up based in San Francisco. Bond connects banks with companies that want to add financial services to their portfolio of customer offerings. Sure is another fintech start-up that offers insurance tech products to retailers and insurance partners so that they can integrate them.
3. Fintech trend: fintechs reaching out to other market shares Where? Europe
Europe is a flexibly and comprehensively regulated home for fintech companies, which is why it has seen so much success over the last decade or so. Established fintech start-ups are now looking to take their success overseas into other regions. This is the major trend for fintech in Europe this year, following some major moves in 2019.
For example, German-based challenger bank N26 provides mobile banking to more than 3.5 million customers in its home country. And in August 2019, N26 linked up with Axos Bank to launch in the US. It’s a similar move to Monzo, a challenger bank in the UK, which is also chasing US customers after it joined up with Sutton Bank in June 2019 to expand into North America.
4. Fintech trend: start-ups race to become the next ‘super-app’ Where? Asia-Pacific
More than 600 million people live in SE Asia, and there is a burgeoning middle class. They have money to spend and Internet access via mobile platforms, making this region extremely fertile for fintech start-ups scaling financial services products.
A major trend for start-ups is to become the next ‘super-app’, based on WeChat and Alipay in China. These hugely successful financial services apps began in areas that are outside the sector. WeChat began as social media and Alipay as ecommerce site Alibaba. But both have expanded to offer a wide array of financial services and payment options to individuals and businesses. This is the model we can expect to see more of in SE Asia. Indonesia’s Go-Jek is a good example. Having started as a transportation and delivery app, it now offers Go-Pay and other services.
I’ll be interested to see how far these trends penetrate throughout 2020 and into the new decade.
