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Key Trends Fueling Fintech Growth in 2021

Banking CIO Outlook | Thursday, August 12, 2021

In 2020, fintech became critical for business survival during the pandemic, serving as a key enabler of the rapid migration to digital payments at a time when people were opening their wallets to new transaction alternatives.

FREMONT, CA: Blockchain is built to manage situations like this. Using a generic ledger can improve the entire process. And, because the information is refreshed in real-time, the flow of information is quick, making it simple to base business choices and policies on it. A solution like this also improves the trade's entire lifetime by lowering shorting risks and increasing accountability. In 2020, fintech became critical for business survival during the pandemic, serving as a key enabler of the rapid migration to digital payments at a time when people were opening their wallets to new transaction alternatives.

It is anticipated that the digital transition will continue in 2021, but for different reasons than in 2020. If last year was about survival, 2021 would be about convenience, inclusivity, and sustainability, which will fuel the further adoption of financial technology in the coming year and beyond.

While COVID spurred contactless technology acceptance, the demand for convenience will propel it even further.

Contactless payment ultimately gained widespread acceptability in North America while we were wiping down parcels and food and stockpiling hand sanitizer. According to a National Retail Federation (NRF) poll, 19 percent of consumers made their first contactless purchase in May, with 57 percent anticipating they will continue to use contactless payments after the outbreak

This rise in adoption, driven by the need for contactless payment solutions, is expected to continue in 2021 as more customers become aware of the convenience they enjoy when utilizing these solutions.

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Another factor fueling fintech growth will be the inclusion of the "unbanked," or individuals with limited or no access to financial services. According to the World Bank Group's Global Findex Database, around 1.7 billion adults do not have a regular banking account, whether with a financial institution or a mobile money provider. Banks and government agencies can – and will – look to the fintech community in 2021 to help involve more individuals in the American economy by giving access to new financial service solutions.

A Converged Card, for example, is a state-issued driver's license or ID credential with a built-in payment credential. This could be in the form of a physical card or a digital ID on a mobile device. Customers can also use the same card to make payments anywhere that accepts credit cards. This not only saves costly cash-checking fees and delays caused by waiting for a check to come by mail, but it also assures that the funds are going to the intended individual and that the ID card's face matches the person using the card.

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