Top 10 Financial Trends to Watch Now

10 Popular Trends to Pay Attention to Now

Economics clearly dictates that the global financial industry is unimaginably vast and is rapidly progressing due to technologies, conditions, rules, and advancement. As we advance into the 2021s, there are few trends that are becoming clearly visible and which are going to shape the finance sector in the next years. Here are 10 financial trends to keep an eye on now:

1. Banking and its Digital Transformation

We can describe the digital transformation that is now taking place in banking as monumental. Innovation and technology are increasingly becoming the key areas where banks seek to enhance product, customer and operational effectiveness and efficiency to remain relevant and viable. Today’s consumer or even client now demands an onsite banking be it depositing, paying bills and other services such as wealth management and even loans. The bank that invest in having good digital business strategies today will be at a vantage position in future. 

2. Open Banking Growth

Implementing rules and regulations of open banking are on the rise across the global which will result in an increase in transparency and innovations. With permission from the customer, through open APIs, the banks can permit third party secure access for sharing of the customer’s financial details or to perform any transaction. This is encouraging innovation in the financial items/products as well as the services that address the needs of the consumers uniquely. Thus, its is for us to anticipate the growth of the open banking ecosystem going forward.

3. Challenger Banks Disrupting 

New generation online only challenger banks are gaining prominence worldwide because of innovations and far better mobile applications. Most have no monthly and higher savings rates, personal and spending insights and budgeting and many others. Businesses are making their incumbents to find new grounds or lose market share within the young millennials and the Gen Z populace. The challenger bank revolution has only just started.

4. Contactless Payment: Now, Even Faster 

The current global pandemic led to epidemic-level contactless card payments using NFC and purchases made with the help of mobile wallets. Consumers now are expecting effective touchless payment solutions in every store for safety purposes. Other related innovations in QR code payments and wearable payment devices are also going up. In simpler terms, the future of payments is tap-and-go.

5. Embrace of Cryptocurrencies

Digital currencies such as the Bitcoins have existed for over a decade but 2021 was a year that saw a higher tempo across the blanket with giant’s financial institutions including banks, investment firms and FinTech firms embracing the digitized currency. Central bank digital currencies are also being considered by governments as the regulation of the cryptocurrency market likewise advances. Use of cryptocurrency will continue to expand to other strata of the society.

6. ESG invested has slowly gained popularity in the last decade as investors demand more investment options 

Yet globally, the practice of investing with an environmentally, sociopolitically, and governance-conscious approach is swelling at a terrific speed. The numbers for ESG Investment and funds investing in sustainability tripled to trillions of dollars with Millennials leading impact investment. We can expect more innovation in the ever evolving ESG field that will force asset managers to adopt sustainable products.

7. The Increase in Fintechs and Neobanks

The emergence of startups such as financial technologies or digital neobanks and related services that meet every banking requirement continue at a phenomenal rate.  ACL support in its simplicity has received a positive reception from consumers to its speed and convenience and new phenomena. As user expectations change, incumbents will have to look towards partnering with or acquiring more startups.

8. Embedded Finance Taking Over

Embedded finance delivers real-time banking and payment services within products that are not traditionally considered as financial providing customers with better access to fintech services. Such a trend accelerated by firms integrating payments, like Uber now has, or Shopify which offers banking. Expect more ecommerce platforms, tech firms and retailers and services to push more financial products onward.

9. CBDCs Emerging to Market 

Some of the largest national banks have already been preparing for the release of official digital currencies in the next few years. While the specifics and the timing may differ, governments seem to believe that centralized bank digital currencies can offer improvements in terms of payment speed, security, and identification, as well as provide financial inclusion compared to physical cash behind that fiction. 2023 could be the year of the first CBDC pilots.  

10. Growing Cybersecurity Threats 

It has been observed that as financial organizations use more digital products, shift services online, threats are also much larger and improved. Phishing, scams, data and network thefts, intrusion and ransomware attacks are growing rapidly against this broadening attack area. Financial firms will be investing most in security & fraud management.