Top disruptive fintech trends to watch for in 2020

A post-pandemic glimpse at the fintech trends

We started this year with a top-to-bottom overview of the “big things” in the booming fintech industry. We mentioned AI and robotics, blockchain, and big data among the trend-setting technical advancements that spur further growth of fintech, which looked quite promising.

However, the outbreak of COVID-19 has brought uncertainty and recession in fintech startups, some of which resorted to significant layoffs and cutting off credits. In the face of the pandemic, companies of all sizes and domains put their digital transformation on hold to manage their capital more carefully.

In the wake of this, VCs, startup founders, and others have critical questions, such as:

  • Why is fintech important for the post-coronavirus landscape that forces people to practice social distancing and move online?
  • Will fintech startups raise funding?
  • What fintech trends related to coronavirus will dominate in business and technology?

Let’s get these questions answered in the article!

Fintech investment has fallen (and so has the deal number)

According to TechCrunch, fintechs faced a coronavirus-induced fall of funding in the first two quarters of 2020 as compared to the same period in 2019. In particular, the total amount of funding is down more than a half, from $135 billion to $58 billion. The same tendency is valid for the deal number, which has dramatically decreased from 1,730 to 1,075, and the drop is likely to continue.

Still, fintech unicorns such as Robinhood, Tradeshift, and Carta have raised the most funding in Q1 and Q2 2020, and they keep on showing positive growth trends. However, there are still possibilities for some of the startups to thrive, claim the experts of BBVA, a global financial services group. Those fintechs that cut down on innovative yet unprofitable projects and focus on their proven and effective business directions will succeed.

Fintech investment has fallen (and so has the deal number)

New fintech products are coming to the fore

Fintech startups are known for their ability to pivot and adapt to the change, which helps them turn the tide even in the face of a crisis. Some of them have created products in response to the pandemic to support the most vulnerable and impacted social groups.

For instance, Chime, a leading U.S. digital bank, started offering a service of advance payments of the stimulus money provided by the U.S. government to support people through the crisis. Thus, those having trouble paying their bills can receive $200 that won’t be labeled as a loan, in advance. Another example is Credit Kudos, a UK-based startup credit reference agency. It introduced Covid Credit, a service to support the self-employed and small businesses, helping them verify the loss of income with open banking data. This allows them to get loans at a reasonable rate faster to keep a business or household afloat. Since it’s a crucial question for many businesses and self-employed affected by the pandemic, the trend of new fintech products emerging is here to stay.

Digital-only banks are on the rise

As stated in Oracle’s survey, 60% of customers across 13 countries want to bank online. The fact that people continue to practice social distancing, avoiding long queues and annoying dividing lines, plays to the favor of digital banks, too. The recent stats show that although 62% of consumers saw value in having local branches, the frequency of visits has fallen from a few times monthly to a few times annually. What’s more, brick-and-mortar banks review their branch distribution system, closing more branches in fear of an upcoming recession. Does it mean fintech will replace banks? Not likely, but the trends of increasing customer adoption of digital payment, lending, and other services offered by online banks will continue.

AI, machine learning, and robotics are thriving

AI and machine learning to improve fintech

AI, machine learning, and robotics rank high on the list of current fintech trends, and they’ll continue doing so during the pandemic. Fintechs will rely upon AI to detect payment fraud, facilitate credit requests, and provide effective customer service. For instance, machine-learning algorithms used by Funding Circle streamline processing credit requests and support decision-making, due to quick assessment of the creditworthiness of businesses and automated loan distribution.

Additionally, AI has been long helping fintechs to analyze customer behaviors and transactions and spot non-typical activities, thus preventing financial fraud, identity theft, and other cybercrimes. Finally, chatbots (or their special kind, robo-advisors) are another hot trend in fintech. They serve as a means to quickly respond to customer requests and solve relatively simple issues, without reaching out to a human advisor. As human financial advisors are highly paid professionals, leveraging the technology is also cost-saving, which is a good point when the crisis urges you to tighten your belt.

Big data is still big

Fintech companies are still relying on big data a lot

Fintech companies have long been relying upon big data for customer segmentation, managing risks, and detecting fraud, and these aspects come to the fore amidst the COVID-19 pandemic. Due to the uncertainty it brings, fintechs will need to foresee and manage investing risks more effectively. They’ll use big data in predictive analysis to create risk profiles and make safe decisions regarding future investments or lending. Together with AI, big data helps to spot violations from the casual purchasing habits of customers and prevents fraud. Another fintech trend in big data usage is customer segmentation. It allows fintechs to make more personalized and relevant offerings, thus spurring customer loyalty and retention.

Innovative payment methods are increasingly in demand

Innovative payment methods

One more fintech trend that ramped up with the virus distribution is payment innovations, such as mobile wallets and contactless payments. Mobile payments have skyrocketed since 2016, when 90% of smartphone users were paying with their mobile devices, according to TechCrunch. Mobile wallets such as Apple Pay and Walmart Pay are struggling to replace actual wallets. They’re likely to succeed in it, together with contactless payments, QR codes and other fintech solutions, since the fear of people getting infected through surfaces or objects is still pervasive.

Blockchain: the hype is fading

A few years ago, when cryptocurrencies were on the rise, blockchain advocates were proudly claiming the technology would revamp banking transactions and save banks tens of billions of dollars annually. Now, there are signs that blockchain hasn’t met these expectations, failing to make a breakthrough in the financial sector, and the COVID-19 pandemic has only stressed the negative trend. For instance, in April, the United States Small Business Administration introduced the federal Paycheck Protection Program (PPP), allowing fintech lenders to provide financial assistance to small businesses affected by the pandemic. However, the cryptocurrency lenders weren’t approved to participate in the program, which clearly shows the disillusionment with the blockchain technology. Still, the blockchain trend may be relevant and impactful for other domains, such as industrial IoT, education, healthcare, and insurance.

A wrap-up

While being a challenge for many businesses, the pandemic holds endless opportunities for fintech startups. Fintechs that keep an eye on the latest industry trends, work on their key products’ quality, and refrain from unproven and risky innovations will remain relevant and successful in the changing post-COVID landscape.




A one-stop custom software development company. We provide dedicated teams to help VC-backed startups and fast-growing companies build products that users love.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Stocks: Re-Aligning Portfolio & Year End

Why We Love Texas

The Australian Insolvency Regime

Is Harley-Davidson Planning to Take on Lime and Bird with their new E-bike?

Medical Ventilator Market Size Analysis, Share Value, Regional Insights, Future Growth Trends and…

Smartlands to Release White Label Services for Business to Get Ready to Post-COVID-19 World

Work Tech M&A and Investment Report 2021

Work from home — Decentralization of CoinDCX

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
iTechArt Group

iTechArt Group

A one-stop custom software development company. We provide dedicated teams to help VC-backed startups and fast-growing companies build products that users love.

More from Medium

Platform Capital invests in Merge

AI/ML solutions in Product Management: Capstone 2

PitFalls To Avoid While Building A Fintech App — Backend

Data-driven Revenue Growth Management for CPGs