2018 was a record year for FinTechs (see our FinTech annual review). However, the industry is undergoing dynamic change, which is why it will definitely remain exciting in the FinTech world in 2019 as well. The renowned magazine Bloomberg has identified the best five fintech trends for the new year, which we summarize for you.
FinTech Trend # 1: Consolidation
The big FinTech euphoria seems to be over for some. But the ever higher funding speaks a different language. An end to growth is therefore far from being in sight. Experts therefore view development as a sign of consolidation. The whole industry is simply normalizing – but at an increasingly high level.
FinTech Trend # 2: Mega Fundings
2018 was the year of mega-funding for FinTechs and this trend will continue in 2019 as most experts agree. However, this could make it even harder for early-stage fintechs to find suitable investors. Because the FinTech forest has already cleared and only the most established companies are left. Accordingly, they can earn the largest funding for themselves.
FinTech Trend # 3: Big Tech Vs. Big finance
Not only the traditional banking industry trembles before the entry of GAFA (Google, Apple, Facebook, Amazon) in the financial world, but also small to medium-sized FinTechs who have already established a standing in their field of business. With Apple and Google Pay, some of the big ones have at least one foot in the door. Also, the fact that Google received an e-money license for Europe last week suggests that the trend continues in this direction. But experts are the first all-clear: it will take until the first Facebook bank tower in Frankfurt. The financial industry is not only highly regulated, but also much more deadlocked than the dynamic environment GAFA is used to. It will therefore take time for the tech giants to familiarize themselves with the unfamiliar environment and get a foothold.
FinTech Trend # 4: Payment is faster
Everything about payment was already a huge issue in 2019 – be it mobile payments with Apple or Google Pay, or contactless payments with EC or credit cards. In this context, however, the names of traditional banks are rarely heard. That should change in 2019. Classical financial institutions have now understood one thing: if they do not improve their current payment infrastructure, they are increasingly and, above all, even faster relieved of FinTechs. Real-time remittances, among other things, play a major role in this regard and have already been possible in Germany for savings bank customers for some months, for example. It remains to be seen whether this will also be possible across banks in 2019 to attract digital middlemen and competitors, such as PayPal, to make money transactions superfluous. It is also exciting to see if more banks can work their way into cooperation with Google and Apple Pay or continue to stubbornly try to implement their own mobile banking solutions until now.
FinTech Trend # 5: More IPOs?
So far, many fintechs are still hesitant before going public, but this could change in 2019. In contrast to previous years, many more fintechs have now reached a size that makes an IPO possible at all. On the other hand, only the fact that the young companies have reached this size without IPO and only thanks to mega-funding speaks for the fact that the mostly FinTechs also get along well without public money. Experts also disagree about this and it therefore remains to be seen whether we will see one or more major FinTech IPOs in 2019.