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Five fintech trends that will mark 2020 in Spain

It seems that the health crisis has affected the fintech sector as well. In this scenario, Spanish financial product comparator HelpMyCash shared with Cointelegraph en Español five trends to be observed in the area of ​​financial technology in 2020.

“In the first half of the year, global investment in this sector was $ 25.6 billion, according to KPMG. It’s quick to say, but the figure is far from last year’s 150 billion. But still, 2020 was also a year of consolidation for a sector that is increasingly pervasive to consumers”They explained from HelpMyCash.

“”The use of fintech companies has become so popular that four out of ten bank customers would choose a non-traditional financial service provider if they had to choose a new one, according to the V-Barometer for financial innovations from Funcas and Finnovating. This is an increase of 13 percentage points compared to 2018”They added later.

Five fintech trends that will mark 2020 in Spain
Five fintech trends that will mark 2020 in Spain

With that in mind, according to the Spanish financial comparator, the trends are as follows:

1- growth of fintech banks

It is becoming more and more common to open an account with “fintech banks”. The product catalog, the lack of commissions, the benefits to travel or the technology of its apps have fallen in love with many users.

The British neobank Revolut already has more than 650,000 Spanish customers and 13 million users worldwide. In July, it announced that it had raised $ 80 million as part of its Series D funding round, which was to be added to the $ 500 million raised in February. The company has a valuation of 5.5 billion.

N26, the other heavyweight in European fintech banking, recently announced that it has exceeded half a million customers in Spain. The German bank has increased its user base by 42% this year and plans to reach one million Spanish customers in 2021. Last May, the Series D funding round added an additional $ 100 million to the N26 at a valuation of $ 3.5 billion. The fact that fintech companies continue to raise capital in this regard also implies that their strategy and potential has been validated, sources told the HelpMyCash comparator.

2- Promote digitization

Covid-19 has forced us to turn to the internet more than usual. According to a study by ING, 31% of Spaniards have increased their use of digital banking due to the pandemic. Long-standing companies have reacted in such a way that the difference between a banking app and a fintech app is no longer so great.

More and more banks are integrating their own fintech toolsB. Financial aggregators, expense categorizers, options to round up purchases and store returns, etc. Additionally, traditional banking has become increasingly technological as it has digitized some of its processes, such as applying for a mortgage.

3- More plastic money

Another trend seen this year is the reduction in cash use. A third of Spaniards would be willing to give up cash and 64% say they use less cash than they did a year ago, according to an ING report published in September.

While Lockdown reduced transactions overall, the big loser was cash. In the second quarter of this year, card purchases fell by 16%, while cash withdrawals at ATMs fell by 52%, according to the Spanish bank. The fear of contagion when handling cash and the fact that even the retail chains themselves recommended the use of the card have sparked a trend that has been emerging for some time. In 2019, card operations increased 16% year over year, while payouts decreased 3%..

4- Inexpensive investment

Low cost brokers have arrived in Spain. Revolut started its broker in 2019 and offers standard customers up to three free trades per month (no limit for metal account holders). Currently, only US listed stocks are allowed to trade.

Ninety-nine, who arrived in Spain this year, charges a flat rate based on the money the customer has. For a portfolio of 1,000 euros, for example, the monthly costs are 51 cents. It gives access to a limited number of stocks that are most popular in the American market especially.

For its part, XTB reduced its commissions last October. Since then, no sales commission is charged for savers with a monthly volume of up to 100,000 euros when investing in stocks or ETFs. This enables you to invest in more than 2,500 European and US stocks.

Roboadvisors have also gained weight. The assets under management of automated investment managers in Spain increased by 22.5% compared to the previous year, according to Statista. With Roboadvisors you can invest in funds, ETFs or portfolios of pension plans that are tailored to the client’s risk profile and have lower commissions than those charged by traditional banks.

5- New financing options

It is becoming easier and easier to buy online and pay in installments. Thanks to the cooperation agreements that retail chains have concluded with traditional financial companies and also with new fintech companies. With these systems, the customer can make an online purchase and finance it at the end of the process.

On the other hand, The fintech industry has created a new breed of company that focuses on salary advances. Operation is simple: the customer can collect the money for the days on which he has already worked without having to wait for the end of the month. Companies must register for the service so that employees can access it. In contrast to loans, in reality the customer does not assume any debt as such and does not pay interest, only a commission.

In a context like the current one, where the fintech industry continues to reign supreme and where clients are increasingly diversifying the way they procure services, financial literacy is essential to properly managing our finances, according to HelpMycash’s sources.

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