Top 10 Fintech Trends 2021 - Nick Maynard, Lead Analyst James Moar, Lead Analyst Susannah Hampton, Senior Analyst - Juniper Research
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Top 10 Fintech Trends 2021
Nick Maynard, Lead Analyst
James Moar, Lead Analyst
Susannah Hampton, Senior Analyst
www.juniperresearch.com
Agenda 1. Introduction 2. The Top 10 Fintech Trends for 2021 3. Questions & Answers www.juniperresearch.com
Juniper Research Overview & Insight Areas
• Formed in 2001, Juniper Research is a mobile and 10%
digital market specialist with a worldwide client base.
• We are a trusted research partner of many of the 20% 40%
world’s leading organisations.
• We provide both off-the-shelf research and bespoke
content across more than 50 markets in the mobile
30%
and digital ecosystem.
• Our team specialises in identifying changes and
disruption in the market. North America Europe Asia Rest of World
Some of our clients
www.juniperresearch.com
Webinar Overview
• Second set of fintech trend predictions.
• Focus on:
a) Product launches What is the
Why 2021?
Opportunity?
b) Planned legislation
c) Showcase events
• Predictions covered in reverse ranking.
• Webinar followed by Q&A
Juniper
Who
a) Send questions via chat box Research
Benefits?
Predictions
www.juniperresearch.com
2020 – We Said… 1 Blockchain will Disrupt International Money Transfer ✓ 2 Contactless Cards to Reach Scale in the US ✓✓✓ 3 Tech Firms to Move into Banking ✓✓ 4 Facebook Pay to Gain Momentum, Despite Libra Toxicity ✓ 5 3D Secure 2.0 to Enforce de facto SCA Implementation ✓✓ 6 Challenger Bank Consolidation Begins X 7 QR Payments to Reach Scale in Emerging Markets ✓✓ 8 Latin America will Emerge as a Crucial Payments Battleground ✓ 9 Digital-only Banks to ‘Rebundle’ Services Using Open Banking ✓ 10 Instant Payment Momentum to Build, with International Interoperability Key ✓✓ www.juniperresearch.com
10
Digital Onboarding to Mature Rapidly
in Wake of Pandemic10. Digital Onboarding to Mature Rapidly in Wake of Pandemic What is the Trend? Digital onboarding has had to evolve rapidly to cope with the requirements of remote working, forcing digital onboarding into maturity. • Digital onboarding adoption has skyrocketed, with extra features evolving throughout the year. • This has been most visible in markets where regulatory support for digital methods has been strong. Why 2021? With consumers now used to digital-first interactions, getting onboarding solutions right now is key to future new business. • Smooth digital onboarding will differentiate businesses that get it right, and keep their flow of customers steady. • Businesses that cannot provide a smooth digital onboarding experience will fall behind and have customers churning away Source: Daon before full enrolment, based on expectations set in 2021. www.juniperresearch.com
10. Digital Onboarding to Mature Rapidly in Wake of
Pandemic
Who will Benefit?
Geographic Split of Installed Digital Identity Apps in
• Consumers: As onboarding processes become smoother, 2021
less time will be wasted, and make the process of
switching providers less daunting; allowing the best deals
to be found more easily.
• Digital Identity Providers: They will get new customers,
looking for features that will provide a smooth and distinct
customer journey.
Juniper Research Prediction
The leading markets in 2021 for this will be markets where
regulators support the use of digital identities for
onboarding, giving the lead in overall digital identity
management to APAC.
North America Latin America West Europe
Central & East Europe Far East & China Indian Subcontinent
Rest of Asia Pacific Africa & Middle East
Source: Juniper Research
Related Research:
Digital Identity: Technology Evolution, Regulatory
Landscape & Forecasts 2020-2025
www.juniperresearch.com9 AI-powered Innovation in UX will be Critical to Banking Success in 2021
9. AI-powered Innovation in UX will be Critical to Banking Success in 2021 What is the Trend? 2020 saw big changes in the banking market, fuelled by the pandemic, Monzo Spending Insights with significant acceleration of the transition to digital banking. 2021 will therefore be the year that digital banking differentiation becomes critical with competition mounting, meaning AI-powered UX has an important role to play. • AI can power insights into spending and customisation of the user experience, which can differentiate services. • AI & analytics are important tools for successful digital-only banks which traditional banks are still implementing. Why 2021? The growth of digital banking means that it is more competitive than ever before. • Digital-only banks have not disappeared as many predicted; putting pressure on traditional banks. • Customers now expect more from their bank, with differentiation on price Source: Monzo difficult to achieve in a commoditised market. www.juniperresearch.com
9. AI-powered Innovation in UX will be Critical to
Banking Success in 2021
Who will Benefit?
Digital Banking Users (m), Global,
• Traditional Banks: Offering a more compelling UX will 2018-2021
3,000
boost customer retention and acquisition.
• Users: Increasing the value proposition of holding a digital
2,500
bank account.
Juniper Research Prediction
2,000
Traditional banks will evolve their digital offerings using AI to
create a better UX, increasing their digital value proposition
1,500
significantly. This will create:
• Stronger competition to digital-only disruptors. 1,000
• Better data-driven insights for users, making digital
banking a more positive experience overall. 500
-
2018 2019 2020 2021
Related Research: Source: Juniper Research
Digital Banking: Banking-as-a-Service, Open Banking &
Digital Transformation 2020-2024
www.juniperresearch.com8 The Rapid Rise of Social Commerce and the Need for New Payment Capabilities
8. The Rapid Rise of Social Commerce and the Need
for New Payment Capabilities
What is the Trend?
The omnichannel experience within eCommerce is now being extended Platforms Using Social Commerce
further through new developments, such as social commerce.
• eCommerce now moving towards increasing the availability of (physical)
products in real-time, linking brands to their consumers with less
intermediaries.
• Several of the major social platforms have recently introduced shopping
functionalities.
Why 2021?
Mobile phones are increasingly seen as a convenient way to shop. The
ability to link direct and purchase through a social media app makes the
shopping experience faster and smoother.
• A growing number of social media platforms are offering an increasingly
embedded commerce experience.
• Social media ‘influencers’ are likely to play a key part in this growth.
Source: Snapchat, Instagram, TikTok
• Strong potential for Facebook to develop and offer similar in-app commerce
features as players such as WeChat.
www.juniperresearch.com8. The Rapid Rise of Social Commerce and the Need
for New Payment Capabilities
Who will Benefit?
Total Smartphone Users who Purchase Physical
• Merchants: Social commerce can boost sales, particularly Goods (m)
amongst the younger demographic. 1,850
• Consumers: The shortening of the shopper engagement 1,800
and purchase cycle offered by social commerce fits well
1,750
with increasing consumer demand for transaction speed
and convenience. 1,700
Juniper Research Prediction 1,650
• With high user bases for the likes of Instagram, Snapchat 1,600
and TikTok, there is a high potential for the roll-out of
1,550
further eCommerce features.
1,500
• The number of smartphone users purchasing goods using
their phone will continue to grow. 1,450
• Potential shift towards the complete disintermediation of 1,400
2019 2020 2021
the merchant checkout process.
Related Research: Source: Juniper Research
eCommerce Payments: Emerging Trends, Opportunities
and Market Forecasts 2020-2025
www.juniperresearch.com7
Transparency & Speed in B2B Payments
to Rise Rapidly7. Transparency & Speed in B2B Payments to Rise
Rapidly
What is the Trend?
B2B payments have been complex and difficult to manage for
many years, with accounts payable & accounts receivable B2B Payments Market Segmentation
processes consuming large resources within corporates.
• 2021 is the year that this complexity will begin to be resolved,
with new injections of transparency and speed.
• The degree of automation will significantly increase, easing
resource burdens.
Why 2021?
2020 saw unique pressures applied to B2B payments and
also the development of technologies that have the potential
to revolutionise the way payments are made.
• COVID-19 has had an important impact – many businesses
Source: Juniper Research
have had to operate fully remotely, exposing creaking payments
processes.
• Instant payments schemes, which with their ISO 20022
standards add transparency as well as speed, are coming of
age.
www.juniperresearch.com7. Transparency & Speed in B2B Payments to Rise
Rapidly
Who will Benefit?
Total Cross-border B2B Payments Value ($bn), 2020-
• Businesses: Simplified B2B payments processes will 2022, Global
mean less resources needing to be spent, quicker $40,000
reconciliation and less payment delays.
$35,000
• Automation Vendors: Demand will increase for
automation software, boosting revenue in the area. $30,000
Juniper Research Prediction
$25,000
• Instant payment schemes, with added transparency, will
be a major enabler of simplification in B2B payments. $20,000
• Automation will reduce the burdens businesses face in $15,000
accounts payable/receivable.
$10,000
$5,000
$0
2020 2021 2022
Related Research:
Source: Juniper Research
B2B Payments: Domestic, Cross-border & Instant
Payments 2020-2025
www.juniperresearch.com6
Open Banking Business Models to Come
of Age in 20216. Open Banking Business Models to Come of Age in 2021 What is the Trend? Open Banking saw widespread deployment in 2020, but 2021 is the year the business models will come of age. • Open Banking infrastructure is now in place, particularly in Europe, but has seen relatively little use to date. • Business models will mature and Open Banking will become a valuable part of the ecosystem in 2021. • Services will move beyond aggregation and mature in areas such as advanced financial insights and credit. Why 2021? This year, the correct conditions are in place to achieve Open Banking success. • Infrastructure is in a good state in Europe, with vendors such as tink rolling out services on a widespread basis. • Consumers are more engaged with digital banking and are looking for ways they can get the most out of their banking experience. www.juniperresearch.com
6. Open Banking Business Models to Come of Age in
2021
Who will Benefit? Total Open Banking Users (m), 2029-2021, Global
• Banks: These will be able to offer more advanced Open 45
Banking capabilities, boosting the value proposition to
40
users.
• Users: Users will have a more complete set of Open 35
Banking capabilities.
30
Juniper Research Prediction
25
• We expect Open Banking to become increasingly
important in banking, enabling more advanced services for 20
users which add value.
15
• Open Banking will crystallise around access to credit and
10
advanced financial insights, as well as account
aggregation. 5
0
2019 2020 2021
Related Research:
Open Banking: Opportunities, Challenges & Market Source: Juniper Research
Forecasts 2020-2024
www.juniperresearch.com5 QR Code Payments to Accelerate Outside of China & India
5. QR Code Payments to Accelerate Outside of China & India What is the Trend? Following growth in Africa & Asia Pacific, 2021 will see QR payments grow in developed markets. • The US will begin to see significant growth in QR code payments usage. • QR codes will enable small merchants to accept digital payments in an easier way than ever before. Why 2021? The pandemic has drastically increased the need for simple cashless transactions. • QR code payments have proven to be an easy method to deploy, offering strong capabilities with few infrastructure costs. • PayPal has rolled out QR code payments to a number of markets, with CVS signed on as a major partner in the US. www.juniperresearch.com
5. QR Code Payments to Accelerate Outside of China
& India
Who will Benefit? Total Number of QR Code Payment Users (m),
Global, 2020 vs 2025
• Consumers: New QR code payment schemes allow for
2,500
simple payments with loyalty capabilities included. They
also benefit from reduced risk of illness through not
touching surfaces.
2,000
• Merchants: QR code payments are easy and inexpensive
to set up and use, compared with NFC-based payment
methods. 1,500
Juniper Research Prediction
• The low cost of deployment and the increasing popularity 1,000
of smartphones, as well as PayPal’s backing, will be
important to driving the US market forward.
• QR code payments will become popular outside of closed 500
wallets.
0
Related Research: 2020 2025
QR Code Payments: Key Opportunities, Regional
Source: Juniper Research
Analysis & Market Forecasts 2021-2025
www.juniperresearch.com4
Omnichannel Payments in eCommerce
to Rapidly Grow with New Payment
Models in 20214. Omnichannel Payments in eCommerce to Rapidly
Grow with New Payment Models in 2021
What is the Trend?
The COVID-19 pandemic has been a catalyst for the shift to eCommerce, McDonald’s Click and Collect App
as well as channel diversification across a number of verticals and a shift
to new payment models.
• Significant channel diversification across verticals such as restaurants and
hospitality - for example, ‘order ahead’ for delivery or collection.
• Increases in the use of subscription payment models and rising consumer
acceptance.
• With this diversification has come the requirement to pay in different ways.
Why 2021?
The continuation of lockdown measures to curb COVID-19 spread in some
markets into 2021 means that this continues to be a requirement and is
likely to be a permanent change to the way we shop.
Source: McDonald’s
• As consumers have become accustomed to purchasing goods through these
new channels, using new payment models, their use will continue to grow as
will the necessity to facilitate payments in this way.
www.juniperresearch.com4. Omnichannel Payments in eCommerce to Rapidly
Grow with New Payment Models in 2021
Who will Benefit?
Global Subscription Revenue per annum ($m),
2020-2021
• Merchants: More ways to market and sell, increased
sales. $250,000
• Consumers: More ways to buy what they want how, when
and where they want.
$200,000
Juniper Research Prediction
The ability to handle omnichannel payments will be a key $150,000
differentiator for both merchants and payment service
providers.
$100,000
• Merchants will increasingly need to operate in this way, in
order to compete, and will need to invest in appropriate
solutions to achieve this.
$50,000
• Larger payment players already stepping up to the
challenge.
$0
2020 2021
Related Research: Source: Juniper Research
eCommerce Payments: Emerging Trends, Opportunities
and Market Forecasts 2020-2025
www.juniperresearch.com3
Instant Payments to Begin to Reshape
Money Transfer in 20213. Instant Payments to Begin to Reshape Money
Transfer in 2021
What is the Trend?
Instant Payment Providers
Instant payments have made a strong impact to date, posing a significant
challenge to established money transfer models.
• Established business models within money transfer will need to shift and
change, as instant payments systems gain traction.
• Instant payments likely to see strongest growth in the domestic sphere initially.
Why 2021?
As ISO 20022 adoption increases, barriers created by interoperability
issues will fall significantly.
• Use of the RTP system in the US has been increasing steadily.
• Despite delays to the FedNow service launch, a pilot programme is planned
and seeing interest from financial institutions, service providers and payment
processors.
• Use of instant payments will grow for both domestic and cross-border Source: SWIFT, The Clearing House
(RTP), PIX Brazil
payments, with initiatives such as SWIFT’s gpi system gaining traction.
www.juniperresearch.com3. Instant Payments to Begin to Reshape Money
Transfer in 2021
Who will Benefit?
• Businesses: B2B payments will be faster and more cost Total Number of Domestic Digital Consumer
effective. Payments per year (m), 2019-2021
300,000
• Consumers: Faster and free to use bill payments and
domestic P2P payments. 250,000
Juniper Research Prediction
200,000
Instant payments represent genuine progress in terms of
capabilities over previous solutions and pose a significant 150,000
threat to established P2P payment options.
100,000
• However, digital wallets with P2P functions are well
established and represent strong competition for P2P
50,000
payments.
• Banks adopting instant payments schemes must ensure 0
2019 2020 2021
that solutions are leveraged to the greatest extent
possible. Source: Juniper Research
Related Research:
Instant Payments: Domestic & Cross-border Analysis and
Forecasts 2020-2025
Digital Money Transfer & Remittances: Domestic &
International Markets 2019-2024
www.juniperresearch.com2
Explosion in eCommerce following
Pandemic Means Network-level Analytics
will be Critical to Fraud & Loyalty in 20212. Explosion in eCommerce following Pandemic
Means Network-level Analytics will be Critical to Fraud
& Loyalty in 2021
What is the Trend?
Number of eCommerce Physical Goods
The COVID-19 pandemic has brought new businesses online, and seen an Transactions (m), 2019-2021
120,000
unprecedented rise in eCommerce; necessitating new fraud mitigation.
• The stop-gap nature of many anti-fraud solutions will have to change from 100,000
next year, if companies are to cope with new forms of eCommerce and
eCommerce fraud. 80,000
• Network-based solutions will allow online merchants to analyse patterns and
60,000
take learnings from a wide pool of online transactions, not just their own
experiences.
40,000
• The level of data required for these types of mitigation will allow merchants to
see and leverage spending trends for loyalty purposes. 20,000
Why 2021?
0
2019 2020 2021
2020’s eCommerce boom can be put to productive use in models in the
next year.
Source: Juniper Research
• The budget refresh of the new year will allow companies to refocus their
security spend on where it matters most.
• The holiday season has brought in large volumes of data that can be used to
train new network AI products to enhance these offerings.
www.juniperresearch.com2. Explosion in eCommerce following Pandemic
Means Network-level Analytics will be Critical to Fraud
& Loyalty in 2021
Total Spend on Online Fraud Detection & Prevention
Who will Benefit? ($ million), 2020 & 2021
• Card Networks & Data Processors: Network data can $10,000
be leveraged to offer value-added services. $9,000
• Smaller eCommerce Merchants: New tools from $8,000
payment networks will allow them to enhance their CRM
$7,000
and loyalty capabilities.
$6,000
Juniper Research Prediction
$5,000
Anti-fraud spend will grow 8%, double that of 2020’s growth,
and exceeding $9 billion. $4,000
• This will come from both security and customer $3,000
management quarters, as the two become linked. $2,000
$1,000
$0
2020 2021
Source: Juniper Research
Related Research:
Online Payment Fraud: Emerging Threats, Segment
Analysis & Market Forecasts 2020-2024
www.juniperresearch.com1
Dramatic Rise of BNPL for Digital
Purchases in 20211. Dramatic Rise of Buy Now, Pay Later (BNPL) for
Digital Purchases in 2021
What is the Trend?
BNPL has been gaining momentum in the past 12 months as an
instalment payment method for online purchases.
PayPal’s Pay in 3 User Interface
• Offers advantages over traditional credit card model of deferred payment.
• Increasing number of merchants offering BNPL as a payment method.
Why 2021?
The COVID-19 pandemic has served to accelerate an existing trend
towards online shopping.
• With the continuation of lockdown measures aimed at curbing the spread of
COVID-19 lasting into 2021 and the continuing shift towards eCommerce, we
are likely to see an increase in the use of BNPL.
• Big-name players such as PayPal scaling into new markets. Source: PayPal
www.juniperresearch.com1. Dramatic Rise of Buy Now, Pay Later (BNPL) for
Digital Purchases in 2021
Who will Benefit?
Total Remote Physical Goods Purchases (m), All
• Merchants: Lower credit risk, increased basket sizes, Devices, 2019-2021
increased spend. Boosts user experience for shoppers.
• Consumers: Offers a compelling and easy way to defer 120,000
payments for purchases. Greater flexibility. No high APR,
100,000
Ts&Cs associated with credit card ownership. No impact
on credit score. 80,000
Juniper Research Prediction
60,000
• The increasing shift towards eCommerce will lead to rapid
growth of new payment models, such as BNPL. There are 40,000
also calls for stricter regulations to protect consumers.
20,000
• We will see an increase in partnerships and consolidations
-
to allow payment models such as BNPL to be offered.
2019 2020 2021
• It will become essential for payment processors to
prioritise building technological ecosystems to allow the
acceptance of BNPL across all payment methods.
Source: Juniper Research
Related Research:
eCommerce Payments: Emerging Trends, Opportunities
and Market Forecasts 2020-2025
www.juniperresearch.comTo recap… 10. Digital Onboarding to Mature Rapidly in Wake of Pandemic 9. AI-powered Innovation in UX will be Critical to Banking Success in 2021 8. The Rapid Rise of Social Commerce and the Need for New Payment Capabilities 7. Transparency & Speed in B2B Payments to Rise Rapidly 6. Open Banking Business Models to Come of Age in 2021 5. QR Code Payments to Accelerate Outside of China & India 4. Omnichannel Payments in eCommerce to Rapidly Grow with New Payment Models in 2021 3. Instant Payments to Begin to Reshape Money Transfer in 2021 2. Explosion in eCommerce following Pandemic Means Network-level Analytics will be Critical to Fraud & Loyalty in 2021 1. Dramatic rise of BNPL for Digital Purchases in 2021 www.juniperresearch.com
Questions & Answers
Thank you
Email: nick.mardell@juniperresearch.com
Tel: +44 (0)1256 830002
Twitter: @juniperresearch
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