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5 minutes read

Three FinTech Trends to Watch in 2020

By Robert Kazmi
By Robert Kazmi
5 minutes read

FinTech is changing the world at a pace few could have expected a decade ago. The industry’s disruptive potential is hard to grasp because sometimes one can’t even imagine what is about to come. This has its pros and cons. On one hand, a good thing about FinTech’s uncertain future is that almost anything can happen. On the other hand, a bad thing is that almost anything can happen. 

At Koombea we know that ‘uncertain future’ is not something you want to hear. A great way to face the time consuming challenge of imagining the future is to spot the game changing trends, and as you might have guessed, we have already done this task for you. Instead of enumerating every single trend we have decided to focus on the three game changing aspects that will surely define the industry throughout 2020. 


This is a no-brainer. There is no reason to believe that blockchain will be displaced any time soon. It is not a secret that this technology is helping define the industry probably more than any other trend, and yet, its real potential is still to be unleashed. With this in mind, how can the industry expect more from it?

A key to understanding blockchain as a major trend in FinTech is to avoid limiting its scope to cryptocurrencies. Yes, cryptocurrencies are expected to grow as institutional interoperability increases amongst financial institutions, but it is not the only blockchain use you should be on the look for. For 2020 we can expect more from blockchain in the form of digital wallets, asset management technologies, fraud prevention and improved global transactions. There seems to be a particular interest for in-app blockchain transactions through services like WhatsApp and Messenger. Additionally, increased security for international transactions is also projected as more financial institutions adopt the technology. In general, greater efficiency in the global financial system will be one of the things we can expect as a result from blockchain applications. 

However, just don’t get too excited about the future of blockchain. It is still a somehow new technology that needs to come of age. As a result, it still faces many challenges in order to increase its adoption and go mainstream. Data processing capacity and its associated high energy consumption rates remain as two of the major challenges that need to be solved in order to increase its scope and accelerate its adoption. 

Digital Banking 

This trend can be divided into two major categories: digital-only banking and digital banking for traditional banks with branches. In general, both categories share some of the same opportunities and challenges. A major opportunity for digital banking is to reduce the time customers spend dealing with financial services. As more products and services migrate to an online platform, it is expected that banks will be able to reduce costs and increase efficiency. A major challenge is to move beyond early adopters and young customers in order to reach a broader audience. 

Digital-only banks are expected to grow as an alternative to traditional banking, offering both traditional and new services. Nonetheless, in order to do so they must face various challenges. Let us remember that this type of banks will have to step up and compete with traditional ones which have been in place for more than a century. For many users the possibility of having their bank in the palm of their hand has been a revolution not seen since the ATM appeared. To help customers transition towards their platforms, digital-only banks need to generate trust and educate customers. As a result, 2020 can expect digital-only banks to continue consolidating themselves as a serious alternative to traditional banking only as long as they can sort some issues like online fraud prevention and the need to provide excellent online customer support. 

The case for traditional banks differs from that of digital-only banks. Traditional banks will not disappear anytime soon, so they will need to compete with new products and services while maintaining at least part of their existing branch infrastructure. Although it is unclear what will come, it is very likely that what they do to face this challenge will be a trend to watch out in 2020. 

Artificial Intelligence

As for blockchain, artificial intelligence (AI) is a major technological trend to keep on the radar throughout 2020. It is expected that it will produce entirely new innovations and that it will reinvent existing products and services. One of the main features expected to grow is that of AI financial assistants (think of them as chatbots). These will surely help redefine many industry standards like improving customer experience, expand financial literacy of customers and help prevent fraud. 

Thanks to big data, another important field in which AI can produce significant innovations is through personalization. It is expected that the user experience through digital banking will be improved to meet specific needs, not only in terms of in-app navigation, but also through better product and service design. 

Lastly, AI is expected to help decentralize finance by reducing or eliminating the role of several agents throughout various industry services. This will surely impact traditional activities such as currency exchanges, trading, and lending. 

Bonus: Financial Regulation

This could have easily been a major trend by itself, but we consider it to be more of an issue. Since it runs across the three previous trends, we decided to give it an honorable mention. Financial regulation is sure to be one of the most important aspects to look out in 2020 because it will help define the rules for FinTech. How countries decide to regulate financial innovation will determine how new products and services are adopted by the market. It is expected that countries that are able to keep up with regulatory challenges will see the best of FinTech innovations. 

Are you ready to create a FinTech app? Feel free to contact us today for a free consultation!

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