Reminiscent of its 2017 bubble, Bitcoin’s rise in 2020 has once again pushed cryptocurrency to the forefront of public conversation. The value of cryptocurrency is not of importance, but rather the increase in public perception and demand for cryptocurrency usage.
Since the bubble in 2017, the mainstream attention of cryptocurrency has had real time effects on business itself, with household names such as Home Depot and Starbucks accepting cryptocurrency payments. Consequently, financial change and acceptance has occured at a slower rate, with countries now developing regulations and announcing their own stablecoin (Such as EURB, a Euro Stablecoin announced by Bankhaus von der Heydt).
The 2021 rise of bitcoin will see a similar shift to the rapid change in public opinion towards cryptocurrency, not dissimilar to 2017. However, as businesses tailor their offerings to public demand, financial institutions and instruments must follow. For the foreseeable future, financial companies that are able to process and transact in the preferred currency will have the disruptors edge on the market. As Fintech was born out of traditional negligence of customer-demand for UX/UI satisfaction, the cryptocurrency dilemma fits this repeating narrative perfectly.
The financial world has seen a progressive increase in partnerships as the market shifts from a zero sum game between tech entrants and traditional financial institutions to a shared profit model. The most recent high profile case is the partnership between Apple and Goldman Sachs. Until recently fintech as a service entailed providing an API to financial institutions to utilize on their current platform. This, however, only addresses one segment of the market, as smaller institutions do not have the technical capacity to develop their own platform. The opportunity for fintechs to offer their services as a whole platform is already in the works. Giving smaller community banks and credit unions the possibility for effective digitalization. Reflectively, the market has seen an increase in startups tailored to the process of interconnecting smaller financial institutions to fintechs. It is only expected that this will rapidly increase.
The age-old advice of knowing your customers is more often said than done. With advances in data processing technology and AI, hyper-personalization has become more feasible than ever before. Companies that effectively store and utilize data to personalize user experience and financial product offerings will see a competitive edge in the near future. Examples of this are the offering of personalized loan repayment at custom rates, streamlined credit approval, and financial advice on personal financial goals such as student loans. Additionally, fintech companies should look beyond just products, with potential in personalizing UX. The personalization of the user interface and experience is key to sustaining fintechs original disruption of the traditional finance industry. As fintechs diversify their audience or move global, offering the interface and support in the native language of the user will be one way to differentiate from competitors. Going into 2021, fintechs that can hyper-personalize both on product offerings and on user experience will be ones coming out on top.