2020 has been full of unprecedented and unpleasant events, and as we move on to 2021 with our financial resolutions while leaving behind toxic financial habits, we move towards a world where economies struggle to revive their financial health through lucrative efforts and measures. The financial services industry trends for 2021 have been some of the most anticipated and awaited ever since the beginning of the coronavirus pandemic, and here are some of the key financial trends for 2021 that we need to talk about:
- Collaboration over competition
One of the major financial trends for 2021 is the rise of collaboration over competition. The application and development of open banking and its possible uses are set to evolve throughout the financial industry and will subsequently shape a majority of financial market trends. What is open banking? Open banking is a new banking paradigm that employs a liberal API model, allowing firms to access important financial data of customers and utilizing this information to provide unique and relevant solutions.
Moreover, this development in the fintech sector will also pave the way for a more collaborative financial ecosystem where firms will work in sync, not competition, to provide various products and services to customers. Established players in the industry are set to collaborate with emerging fintech startups to scale and distribute their unique products to their customers.
- Attention towards payroll Fintech
There are four evident categories when we talk about payroll fintech, and 2021 seems to be the year where they might finally get the attention they deserve. The first category is Salary On-Demand. Financial technology companies in this section are set to partner with corporations, HR software providers, and payroll systems to enable more flexible access to salaries.
The second category is Salary Advance, and fintech here will provide short-term credit to their employees based on their salary to help them avoid exorbitant interest rates charged by other lenders. The third category set to shape the financial market trends in 2021 is Crypto Payroll, which is one of the newest types and will enable firms to make payments through various cryptocurrencies.
Finally, Early Direct Deposit is the fourth category, which is usually provided by bigger challenger banks and enables employees to receive paychecks up to 48 hours in advance from their standard payday.
- Remote working to become a norm for Finance teams
We have been pushed into the era of remote working and work-from-home and experts suggest that 2021 might not be very different. Remote working is set to become the norm for a majority of finance teams across the globe in various organizations and according to a June 2020 PwC survey, 54% CFOs plan to make working from home or remote working a permanent option.
To facilitate successful and feasible remote working arrangements, two major steps need to be followed.
First, people in leadership and decision-making positions such as CFOs and CEOs have to commit to providing the right and apt technology tools to their employees. Second, they must master collaboration and teamwork among different teams and implement the same cross-functionally too.
This can be implemented through virtual open-door policies and virtual events that involve employees with the help of both HR and IT departments to successfully engage these remotely-operating finance teams.
- Upskilling to be the call-to-action
According to a global survey conducted by IMA for finance and accounting professionals, 12% of the respondents felt that their skills would not be relevant in the post-Covid era, and another 10% were unsure. This survey posed questions around the pandemic’s impact on staffing, revenue management, upskilling, and reskilling.
The key findings indicate that upskilling is one of the most important and relevant financial trends of 2021, and companies must realize the importance of continuous learning and introduce upskilling programs in especially for fields such as blockchain and data analytics, to equip individuals in the finance sector with adequate skills that they will need to compete in a post-Covid world.
- Neo banking
The rise of neo banking is one of the most awaited financial trends for 2021, on the verge of a boom according to several experts. Neo banks are emerging as a suitable and viable alternative to traditional banking models, and the fintech products and services that they offer are essentially redefining the very core of banking. There is a visible consolidation happening across various service offerings, and fintech startups are providing services that integrate the convenience of technology and AI to provide a better user experience to their customers.
These are some of the financial market trends to look out for in 2021, and as this is the year that will witness the recovery of the global economy in a post-Covid scenario, financial technology will play a pivotal role in redefining norms, and helping us handle our money.