Fintech monetization and personal finance literacy are trends

On Wednesday October 29th, the Spanish fintech ID Finance organized a webinar that discussed the trends for 2021 and the evolution of the sector for 2020 with the acceleration of the digitization of financial services in the post-Covid era. 19. Cointelegraph en Español repeated this meeting. Here are some of the conclusions.

HelpMyCash attended this virtual meeting led by its co-founder Olivia Feldman. Finteca with its co-founder and CEO Jordi Domínguez; and ID Finance, represented by their global CMO Alessandro Ceschel. Business journalist Marta Escobar acted as moderator.

Under the title: “Fintech trends: What the future will bring “, Marta Escobar opened the digital meeting with some data and considerations:” 42% of bank customers today would choose a non-traditional financial institution if they had to choose a new provider according to the V- Financial innovation barometer. In addition, according to a study by Qonto, 70% of SMEs and freelancers considered switching to a Neobank last year. “

Fintech monetization and personal finance literacy are trends
Fintech monetization and personal finance literacy are trends

And he went on to explain the 2020 trend in terms of FinTech growth and user confidence in moving to 100% digital solutions. “”In addition to this new reality, FinTech trends have also arrived in recent months. We’re talking about the cashless society, online credit consolidation, or the importance of data, more after the P2D2 regulation is approved”He indicated.

How was 2020 for the FinTech sector?

As they stated, this year has been very difficult for many sectors and every forecast made in 2019 has been blown up. However, containment and social distancing have created opportunities for companies that are digital natives or use technology as a form of operation, including fintech.

For Olivia Feldman from HelpMyCash, The highlight in 2020 was the “great development that the financing and the online sales point have experienced because it was a great novelty and the fintech companies committed to it have developed a lot”.

Another thing that caught his attention is “the speed at which people in their fifties or sixties are getting excited about the online experience than people previously doubted much more”.

For his part, Jordi Domínguez from Finteca considered: “This year was the year FinTech normalized, forced or not. Now it is no longer uncommon to see payments on your phone or watch in a bakery. That situation has caused us to recover because we were two or three years ago and now here is interesting local stuff. ”

He also spoke of “a hybrid model” and stated that despite the digital leap normalizing, they want to go to the office and “this is what fintech companies have achieved because they are forcing the sector to innovate faster”.

In the case of ID Finance, Alessandro Ceschel explained in one sentence how the process in the financial sector has gone over the last few months: “What was once a street away is now just a click away.” In order to establish this trend, the company decided on Experience and the trust that is offered as the foundation.

“Digital doesn’t reach everyone at the same time, but The restriction has made it necessary to overcome the fear of online proceedings. FinTech is not only intended for young people, not at all. Acceptance at all stages of society is very important and this will increase, ”he added.

Relationship between traditional financial institutions and FinTech

The three experts from the FinTech sector also discussed what the relationship between traditional financial institutions will look like, those that are already established and have a large market share, and FinTech, new players who, thanks to their agility and technology, grow rapidly and often become part of large companies in the form of acquisitions.

Alessandro Ceschel commented: “The big technology groups are already in the fintech sector, they have the users, but they have a bank behind them (…). The best-known example is Apple’s credit card in collaboration with Goldman Sachs. ”

At this point, he highlighted the competitive advantage of fintech companies as the main reason for the acquisition and merger processes that the sector goes through: “The speed of adaptation is of crucial importance: the largest does not win, but the most agile. Banks are very solid at the cash level, but they are slow to make decisions. When a FinTech detects a problem, it works on changing it the very same day. I doubt that a traditional bank can. On the contrary, setting up banking systems is very complex for a FinTech, so that these structures continue to depend on the banks. There will be two forces ”.

For his part, Jordi Domínguez said: “Nobody can be a 10 in everything, so the specialization and knowing later which partner is the best for you is fantastic.”

And he recalled that not only traditional bank-FinTech mergers take place, but also mergers between FinTech and related products.

He also said: “Something that has already happened, but we have accelerated FinTech, is the closure of bank offices”. To highlight the agility of FinTechs compared to traditional companies, he gave an example that shows that a bank has to cover many more fronts when making changes, while it is easier for FinTech: “Changing a website from a bank is much more complex to do to have more depth as she offers many services. On the other hand, the website of a FinTech specializing in a product or service is less profound and a change is easy to make. ”

Finally, Olivia Feldman added, “Banks are taking a lot of recommendations and are evolving.”

One of the bets for the co-founder of HelpMyCash will be the subscription model: “This model is easier to digest and we’re more used to it in other areas such as leisure.”

FinTech industry trends for 2021

Olivia Feldman went on to talk about products to analyze future trends: “There will be a great mix of products from different companies.”

At the consumer level, he put a debate on the table: “Financial literacy is becoming increasingly importantbecause access to financial products will not be centralized in a single company, but we will be able to outsource products and services in many different companies and we must be able to manage everything, make good decisions that Limiting over-indebtedness … “.

For Alessandro Ceschel and together with the financial education, it is just as important that companies “explain things clearly and simply, because this goes a long way towards promoting this education”.

He also suggested another challenge that FinTech will have in the future: monetization. “It is a very important point FinTechs scale very quickly, but the key is how we make it profitable. This second part is dangerous and one of the trends we’re going to see: those who have a viable business model and those who are just plain good intent“, He explained.

Other trends he highlighted are the disappearance of cash and the increase in contactless payments through platforms. This coupled with cryptocurrencies: “There was a pretty important leap, but the problem of volatility needs to be resolved. With that in mind, they are already working with coins that are not made for speculation. PayPal, for example, will allow some cryptocurrencies to work next year. “

Jordi Domínguez closed the webinar with the bet that “products will continue to be digitized that have not yet taken the step, but are easy to digitize”.

Another of his bets for next year is the move to “freemium models, a change that is very much decided in many companies”.

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