Fintech Trends to Dominate in 2020

Financial Technology Trends to Dominate in 2020 and Beyond

The pace of change in the banking and financial services (FS) field has never been faster, and fintech is at the epicenter of this reinvention. In the last few years, we’ve witnessed the emergence of new modifications of fintech products and services that are exclusively developed for certain functions within the financial ecosystem, like InsurTech, robo-advising, and RegTech to name a few. It no longer seems a question of if fintech innovation will change FS, but which startups and companies will give it their best shots and take the lead.

Looking ahead, the mix of future financial technologies, investor capital, rigorous regulations, technological advances, and globalization of financial services will drive even more trendsetting developments in the coming years. Many non-sector players apply for FS licenses, while fintech firms expand their scope of services and refer to themselves as technology companies. The lines between industries and locations are blurred. Recently, the main European challenger banks — N26, Revolut, and Monzo — have announced their expansion to the American markets. At a time when Uber has introduced its fintech subsidiary called Uber Money.

At Dashdevs, we always go full force while working with clients and contributing to their projects. That means our team stays on top of fintech trends and IT market as a whole, no matter if it’s the introduction of new security standards and legal regulations, implementation of new monetization strategies, integration of Artificial Intelligence and Machine Learning, or innovative approaches in InsurTech. This report explores the twelve most influential movements that will define the likely winners and losers down the road and feasible insights that fintech product development companies can implement to be ahead of the game.

#1 Focus on the unserved & underserved

The World Bank states that over 1.7 billion people globally don’t constitute a part of the formal financial system and stay invisible for it. According to the report, they don’t have banking accounts because they don’t have enough money (over 60 percent), don’t need it (30 percent), and accounts are too expensive (26 percent). Cost is the main barrier for Brazil, Peru, and Colombia — over 60 percent. The other paper notes that only two percent of the population in India have at least some kind of insurance, and that’s where fintechs gain the lead.

The second and third quarters of 2019 turned into a tipping point and one of the biggest trends in fintech. India observed 23 deals to venture-backed financial and insurtech companies, while China reached $375 million in funding. Latin America has turned into one of the most fast-paced regions for fintech funding with a $400 million round of NuBank, a Brazil-based digital-only bank. So, rather than entering the warmed-up markets, startups take a challenge, find their niche, and win financial backing from investors.

Reaching out to the unbanked is not the only strategy that determines the future of fintech 2020 and beyond. The gig economy is flourishing, especially with the rise of Uber, Lyft, or Airbnb. These days over 40% of Americans make around 40% of their income through part-time freelance jobs, and such contractors have individual financial needs due to inconsistent income distribution, credit needs, taxes, and others. And so knowing that, Uber started to dig deeper and found that around 60% of its drivers lay strictures on their banking accounts six times per month. Additionally, they send about 25% of earnings to their native countries paying high fees, so that’s where the company has found a new niche. Uber fintech division — namely Uber Money — will offer a wide selection of services to a targeted audience, like drivers and other freelancers, helping them to earn, save, transfer, and spend more efficiently and wisely.

What does it mean for your business?

Entering a new market or launching a new product is always a risk for any business, so start small. Financial startups should seek innovative ways to interact with new locations and potential customers, leveraging fintech industry challenges and opportunities. Helping the unbanked and underserved better manage their funds and finance their aims will yield tangible results in the form of client loyalty and increased profit.

#2 Fintech regulations and RegTech companies

2018 and 2019 can be reasonably called the years of Open Banking and PSD2 directive. However, with the introduction of new requirements for strong customer authentication (SCA), the deadline was pushed to 31 Dec 2020, and so they remain high on the fintech industry trends list.

With strong support from governments, these initiatives strain after more transparent and fair fintech digital banking, requiring financial institutions (FI) to develop and open APIs and share data with qualified third-party providers (with client’s permission). This is one of the ways how fintechs can help the incumbents lower the complying costs and streamline operations.

Technology companies, reputed financial actors, and legislators work closely together to introduce new regulatory innovations, but often, new developments require time to mature and define their final applicability. For example, the application of fingerprint scanning or biometric authentication for financial transactions used to create much buzz due to data theft in 2015. However, recent research shows that the market size is growing, and there will be over 2.6 billion biometric users in the payments market by 2023.

What does it mean for your business?

Customer concerns over data sharing with unknown third-party firms are the main stumbling block for financial services technology trends in 2020 and beyond, though it is quite understandable. The core message of these fintech regulators is to boost innovation and competition, provide individuals with a wider selection of financial products, and improve security. It’s up to the banking and financial institutions to communicate the advantages effectively to drive the RegTech trends and extensive adoption among fintech companies in the UK and globally.

#3 Fintech cyber security and stability

The digitization of the industry is a long-term fintech banking trend, and it implicates particular vulnerability to fraudulence, identity theft, espionage, and money laundering. Unfortunately, IT crashes, and data breaches have become too common among banks in recent memory. TSB’s April crash in 2018 led to £107 million loss. In 2019, a challenger bank Monzo asked 480,000 customers to change their PIN numbers due to a bug in the security system. On average, when a financial institution experiences a cyberattack that is particularly targeted at its online banking services, the costs are estimated at $1.8 million. But most importantly, the biggest losses registered have been distributed among smaller companies, allegedly due to lower investment in IT security.

Despite fintech security concerns that around 71% of adopters have, they still give preference to digital financial products. Consequently, this fact places additional responsibility on the fintech companies and their tech departments.

What does it mean for your business?

Financial institutions should invest more in their cybersecurity strategies and methods. Similar to any other urgent threat affecting the whole industry, there are some recommendations that firms can implement to keep up with the current trends in fintech.

  • First of all, be prepared for a cyber attack. Create an incident response plan to ensure your ability to recover from a hacking attack quickly.
  • Talking about cyber security in fintech, companies should not only try to limit the risk of breaches but also mitigate the implications if they become prey to one. One of the approaches is to integrate identity protection services, communicate how the company protects sensitive data, and so drive customer trust and loyalty.
  • Security technologies are evolving with increasing speed to prevent cyberattacks that lead to customers' lack of trust. Financial services companies should be quick and agile in updating their existing systems and frameworks, all while considering new solutions like artificial intelligence and machine learning, biometrics, multi-factor authentication, and others. One of the ways how businesses can prevent cybercrimes is to hire fintech consulting services that can find the best strategy and so restore trust or increase customer confidence.

#4 Digital-only banks

Nowadays, visiting a bank branch turns into a faint echo of the past, and mobile apps can be easily called the future of fintech and banking. CACI states that the popularity of digital solutions will continue its growth, and the proportion of online users will reach 71% by 2024.

The main factors that drive the growth of this trend are a large-scale implementation of mobile technology in financial services, convenience and general availability, as well as lower costs for users. In 2020 and beyond, we’ll see an increasing number of digital banks due to their public support from younger generations who are always on the go and prefer to have all the essential services on mobile devices and at their fingertips.

What does it mean for your business?

Fintech mobile wallets, online global transfers, and AI financial assistants are on the frontlines of the digital banking wave. To prevent customer churn and stay in play, financial institutions have no other option but to leverage the latest fintech innovations. Additionally, targeting younger generations, understanding their needs, and helping them achieve their goals can empower companies to stand out. More startups offer loans to small businesses, though at exorbitant interest rates. With Goodly employers help employees with their student loans, thus attracting and retaining top talent. Divvy turns homeownership dreams into reality, enabling rent-to-own strategy.

#5 Fintech and Big Data

Big data includes all the structured and unstructured information that is later processed with particular analysis techniques and algorithms. It’s one of the most effective tools that fintechs use to outsmart the incumbents and disrupt the industry. If to talk about the exact ways how big data helps fintech, then they are:

  • Customer segmentation. Being more user-centered, FS startups divide their customer base by gender, age, location, economic health, and online behavioral patterns to define their spending habits and create highly-personalized offers and financial products.
  • Fraud detection. As we’ve already mentioned, security will be one of the biggest fintech banking trends in the coming years. Using big data engines, financial institutions can gain a better understanding of the buying habits and online patterns of each user to detect and prevent suspicious activity more accurately and faster.
  • Risk management. Predictive analytics is a powerful tool that facilitates risk management and helps companies avoid poor debt expense or make better credit decisions. Fintechs mine data to create risk profiles of customers applying for financing to identify bad payers or poor investments.

What does it mean for your business?

Big Data and Predictive Analytics push the boundaries for the fintech companies, allowing them to offer more personalized and safe products for both B2C and B2B clients. However, it’s up to the stakeholders to promote data-driven mindsets, build a relevant culture, and define a framework for sustaining ROI from investments and data projects. Developing your own data scientists or partnering with a reliable technology partner is an efficient way to mitigate the talent shortage since IBM states that by 2020, the number of openings for data talents will exceed 2.7 million in the United States only.

#6 Decentralized finance

Let’s start from the very beginning: what is decentralized finance? — DeFi or decentralized finance means the elimination or reduction in the role of one or several agents or centralized processes that have been typically implicated in the implementation of financial services. It’s one of the emerging trends in fintech, but it quickly gains traction. To provide monetary interactions in a more decentralized way, companies apply the following technologies: distributed ledger technology (record-keeping decentralization), online P2P platforms (risk-taking and decision-making decentralization), and even the Internet of Things (IoT), Big Data, Artificial Intelligence, or edge computing.

This emerging fintech trend is already changing payments and settlements, as peer-to-peer foreign currency exchange platforms have started to steal the scene from long-established interbank payment systems. Additionally, decentralized financial technologies are likely to affect capital markets, trade finance, and lending, pushed by the need to quicken services, lower fees, and eliminate bank legacy technologies.

What does it mean for your business?

Constant innovation in fintech payments and digitization of other industry-related services are the driving forces of DeFi adoption. Companies are continuously trying to bring down costs, enhance the speed, and guarantee better transparency of financial operations, all while ensuring accessibility of services to all social groups. There are still many more possible applications of decentralized technologies, which makes it one of the main fintech future trends that will definitely reimagine digital banking in the future.

#7 Fintech blockchain and cryptocurrency

The so-called digital money has already demonstrated to us several methods in which we can apply the fundamental blockchain functionality to enhance existing systems and processes. Moreover, it can already boast of a large army of admirers. The crypto revolution remains relevant for over a decade, so what can we expect from the fintech cryptocurrency movement in 2020 and beyond?

Libra payments, an ambitious Facebook crypto project, is expected for launch in the coming years. Unlike other systems like Venmo or Apple Pay, it’ll be a P2P platform that enables quick mobile transfers of Libra coins but at low or no cost, and won’t require any banking accounts or credit cards. Facebook plans to launch a special digital wallet, Calibra, that will be accessible through WhatsApp or Messenger.

Venus, an open blockchain project from Binance, the largest cryptocurrency exchange globally, is also expected to enter the market in the foreseeable future. The company partners with governments to prevent any regulatory concerns and focuses on smaller locations with unbanked economies.

What does it mean for your business?

The popularity of blockchain in the fintech market will continue its growth, and even today, the expansion is too large to be ignored. In the future, we can expect the appearance of new digital currencies from everywhere, all while witnessing the translation from fiat to crypto. Payments with digital money are happening all over the world, whether regulators like it or not, so your business should be ready to keep up the direction.

#8 Traditional paycheck disruption

Today around 59% of people struggle from paycheck to paycheck in the US only. Such a situation provokes serious money worries for many individuals who are forced to rely on payday loans or predatory lenders charging up to 400% rates for a two-week credit. This fact is one of the key drivers for payroll disruption, one of the main fintech payment trends of 2020 and beyond.

There are more and more fintech firms leading traditional payroll approaches to the 21st century. Gusto, valued at $3.8B, comes with a Flexible Pay feature allowing employees to choose when they want to be paid for the performed work. The Earnin app, valued at almost $800M, also enables users to tap into their earnings prior to their intended payday. Similar services are also offered by Even and DailyPay, and these firms have already partnered with Walmart, Burger King, Westgate Resorts, and others.

What does it mean for your business?

Providing people with more flexible access to their income and contributing to their financial security employers also bolster the chances of retaining valuable talents. Fintech app development companies try to bring more power into the hands of employees, saving them from financially rocky times. But more importantly, more employers opting for this type of service, so be ready to see more payment innovations in the next few years.

#9: Fintech AI assistants

Chatbots is the most talked-about fintech technology trend of recent years, and in 2019 we’ve finally witnessed some promising developments. Conversational banking was adopted by the Bank of America, Morgan Stanley, HSBC, JPMorgan, and many others. Businesses utilize AI technology to improve customer experience, prevent fraudulence, optimize back-office operations, and promote financial literacy among customers. The smart virtual assistant market is anticipated to reach up to $19B globally by 2025.

Talking about fintech trends in 2020, conversational banking will mature and continue its pervasive integration within the industry. In fact, Artificial Intelligence and Machine Learning are expected to lower operational expenses in the banking sector by 20 percent. This dynamic even resulted in the rise of new terms, such as Machine Intelligence and Augmented Finance.

What does it mean for your business?

AI makes a significant impact on the banking and financial services industry, while the future seems to have even more to offer. Considering the fact that intelligent technologies are not easy to implement, and the ‘one-size-fits-all’ approach doesn’t work here, fintech consulting companies with AI expertise will soon meet a ready market.

In the coming years, companies will have to teach their employees to collaborate with AI assistants and control their power. In this scenario, businesses will have to invest in the development of in-house AI experts because over 133 million roles to be created by 2022, led by the division of labor between machines, algorithms, and people. And most notably, even today, over 51% of US and UK companies experience the lack of specialists to put new AI strategies into practice.

# 10: RPA in Fintech

Robotic process automation (RPA) is one of the driving changes in the banking sector and one of the latest fintech trends that are actively gaining traction. It hasn’t made a splash yet, but Juniper Research predicts that RPA revenues in the banking and financial services industry will total $1.2B by 2023, showing a 400% growth from 2018.

Fintech automation is traditionally applied to the existing processes, leading to the reorganization of legacy systems and significant cost reduction for the stakeholders. One of the main advantages of RPA is that it isn’t a point solution, as it’s applicable to any tasks that are rule-based, straightforward, and structured. Except for cost optimization, companies can also benefit from lower human error rates, better customer experience, and more free time and ability to focus on high-value tasks.

What does it mean for your business?

Financial institutions are at the early stages of RPA implementation, but there’s no doubt that it’s one of the top fintech future trends of 2020 and beyond. RPA technology can streamline processes and enhance productivity for small companies with limited resources. Additionally, it can help them improve compliance with strict international and European regulations. Business owners should consider automation as a strategic action on the way to technological advance and strong growth.

#11: Cloud adoption

The number of fintechs choosing a cloud services provider is growing at a steady pace. Despite the fact that today only 22% of all apps run on the cloud, 2020 can become a tipping point for the financial services sector. Based on our experience, the majority of fintechs, starting today, are cloud-native. In this way, teams achieve better agility and scalability, since they don’t need to spend time managing the infrastructure and data centers.

Meanwhile, IBM announced its collaboration with Bank of America to create a fintech public cloud with due allowance for security, regulatory compliance, and resiliency.

What does it mean for your business?

The ability of fintech firms to quickly innovate and offer customer-centered services is the core of the financial revolution, while it’s hardly possible without cloud computing technologies. The migration to the cloud is inevitable, and business owners should be ready for that. The availability of fintech devops engineers locally or remotely will help you build, test, and deliver new products and services faster and more secure.

#12: Fintech consulting

In today’s highly-competitive economy, entering a new market or releasing a new product is a huge risk. Often fintech executives take competition for granted, and shortly after launch, they’re suffocated by a tough opponent. This is one of the forces that drives the popularity of fintech advisory services and turns it into the main B2B fintech trend of the coming years.

What does it mean for your business?

Financial institutions depend on consulting companies to keep pace with technological innovations and get professional advice about payment integration, cloud migration, compliance, and other aspects. Hiring a reputed consulting firm, you can avoid common mistakes, innovate more safely, and allocate your resources more wisely.


Within the last few years, fintech companies are struggling with numerous changes and challenges of internet banking simultaneously. Tough competition, rising expectations, new demographics — these leverages are tricky to address and manage. Fortunately, this is where technology and new developments stand in good stead, supporting businesses with automated solutions, intelligent services, and cloud environments.

Top fintech trends argue that the financial services industry should consistently follow and master emerging technologies and find ways to integrate them with their business strategies to anticipate the wants of tech-savvy customers. Certain techniques and approaches like DeFi or cryptocurrency can become real game-changers and completely reimagine how we do business or interact with customers. However, often, even a smaller innovation like fintech mobile app development or re-design can boost your business growth and attract new customers.

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