Top 13 fintech trends for 2021 and beyond

18 min read
August 16, 2021

In 2020, the global FinTech industry generated a whopping $44 billion of investments amidst the COVID-19 pandemic.

And there’s no indication of it slowing down. So far, American FinTech firms have raised $12.8 billion in the first quarter of 2021 alone, a mind-blowing 220% increase from the previous year.

Indeed, FinTech is one of the most exciting revolutions in the financial world—or any other industry, for that matter.

And, as the cliché goes, you ain’t seen nothing yet!  So here are thirteen trends that will shape the financial world for 2021 and beyond.

Digital-Only Banks

A digital-only bank is one that operates entirely online. Everything from opening an account to making transactions is done through a mobile app or website. It’s in sharp contrast to traditional banks going digital, as they have physical branches alongside online options.

Aside from the absence of brick-and-mortar locations, the biggest differentiator of a digital-only bank is innovation. In fact, fulfilling customer needs which traditional banks can’t meet is the number one motivation for most of these digital banks, according to Lane Martin, a partner at financial consultancy firm Capco.

Mobile banking apps

Fintech app developers →

Major businesses trust us to handle their mobile banking solutions, and we help agile startups disrupt mobile payments, stock trading and the rest of the rapidly evolving sector.

The lockdowns and quarantines during the COVID-19 pandemic also caused more people to adopt online services for their everyday needs, accelerating the growth of digital banks in general. 

For example, JP Morgan and Chase saw a 6% and 10% increase in their digital banking and mobile-active customers, respectively, in 2020 alone. And experts predict that digital banking adoption will reach 2.5 billion users by 2024

Number of active online banking

Users worldwide with forecasts from 2021 to 2024

Number of active online banking

In a way, it’s not hard to see the appeal of digital-only banks. Thanks to the low overhead of having a purely online operation, they can offer low transaction fees and higher interest rates. Plus, as mentioned earlier, they also deliver innovative features that incumbent banks don’t.

But the single biggest draw of a digital-only bank is the convenience of accessing your money anytime, anywhere, without the hassle of going to your local branch.

However, going all-digital isn’t entirely beneficial. Most customers, for instance, still want the option of talking to a human when they encounter problems. The ability to balance innovation with this human touch is what will spur digital banks forward.

Some of the top digital-only banks include RevolutChimeVaro, and Atom Bank.

Fintech-Bank Partnerships

Not to be outdone by digital-only banks, traditional financial institutions are also taking their services online. Many team up with Fintech startups instead of developing the digital infrastructure on their own.

The cooperation between the two is gaining so much traction that, with the decline in VC funding during the COVID-19 pandemic, banks are quietly taking over as the primary investors in FinTech.

While incumbent banks first saw FinTechs as a threat, the benefits of collaboration far outweighed the reasons for competition.

For FinTech firms, the main drivers were stability and compliance. Sizable investments from banks can infuse a much-needed cash flow to firms, freeing them to focus on what they do best—innovating. Established banks also have the market penetration and experience with financial compliance that FinTech firms desperately need.

On the other hand, incumbent banks benefit from the technological innovations that FinTechs can bring. It allows them to deliver a more seamless digital experience to their existing clients and offer a broader range of services.

Fintech-Bank partnerships


  • Stability and cash infusion
  • Experience with financial compliance
  • Market reach


  • Technological innovations
  • Better product experience
  • A broader range of services

Of course, the partnership isn’t without challenges. One of the biggest is a culture clash between the dynamic, entrepreneurial spirit of FinTech startups with the safer, calculating nature of big banks. 

This incompatibility even extends to the underlying tech, as most banks have legacy IT systems that need to be updated for digital integration.

Nevertheless, the trend of cooperation seems to be going strong for FinTech and big banks over the coming years. Some successful examples of recent collaborations include Bank of Montreal and BlendBank of America and Zelle, and ING and Minna Technologies.


Microservice architecture is a software development approach that splits an application into independent components.

Each component, called a microservice, is an autonomous entity that can be created, run, and modified independently of each other. They then communicate with other microservices via application programming interfaces (APIs), thus making them appear as a single, cohesive application to the end-user.

The most significant benefit of microservice architecture is agility and scalability. Traditional monolithic programs are made with individual but tightly coupled parts and thus are challenging to upgrade and modify. This is the exact problem Amazon faced early on in its growth. 

benefits of microservices

Switching to a microservice architecture allows software development teams to create new features and modify existing ones without affecting the rest of the application. This reduces testing time, speeds up the introduction of new services, and lowers development costs.

What’s more, microservices is already a proven architecture. Large tech brands like UberNetflix, and Paypal have successfully used it to scale and dominate their respective niches.

Microservices are also the key to solving many of the challenges of digitizing the financial sector. They bring a sense of safety and resilience to digital banking because if one feature fails, the rest of the system won’t be affected. This can feed innovation and encourage the adoption of bolder features by financial institutions.

The approach can also benefit smaller institutions without the luxury of large development teams. Developers can create reusable, off-the-shelf microservices, then offer them cheaply to smaller banks and credit unions to mix and match as they see fit. 


Regulatory technology, or RegTech, is the technology that helps other FinTech firms and financial institutions comply with regulations faster and cheaper.

The need for RegTech stemmed from the fact that the move to digital financial services increased the risk of breaches, money laundering, and other fraud, thus prompting governments to impose tighter regulatory oversight. 

But if you look at it closely, compliance is just a by-product of RegTech. At its core, it’s all about protecting consumers and their assets from frauds and hacks. This, in turn, gives companies a competitive advantage.

opportunities in regtech

RegTech works by combining artificial intelligence and big data to monitor transactions and identify irregularities. These data are then shared with regulatory bodies via cloud services. 

The value of RegTech is sifting through these large volumes of data to uncover insights, saving the financial institution a lot of time. 

The future is bright with RegTech as various exciting trends drive its growth. One is the use of biometrics for anti-money laundering, as well as Know Your Customer (KYC) processes, and onboarding verification. 

Another is using tools for identifying compliance gaps quickly to help with business decisions. RegTech is also eyed as one of the critical FinTech sectors that can benefit from blockchain.

Blockchain Decentralized Finance

Decentralized finance (DeFi) has been a hot topic ever since Bitcoin introduced blockchain in the early 2010s. Simply put, it’s a system where anyone can get financial products without going through intermediaries like banks or brokers.

While digital money is the obvious application for decentralized finance, it’s only a tiny part of it. DeFi is a revolution that can impact every sector of finance, from stock trading to insurance.

For digital banking platforms, decentralization will have a significant impact. Every financial system in the world currently uses a centralized approach. Banks act as the trusted intermediary for borrowing and lending between two parties and enforces the contract when needed.

Blog 01@2x 1

While this system works, the integrity of the transaction is only as strong as the bank itself. Fraudulent activities do happen, as banks are often the target of hacks and financial crimes. 

And the global financial crisis of 2008 proved that even big banks could fail.

Decentralization solves this problem by enabling two parties to deal directly with each other. Once a transaction or contract is logged into the blockchain, it cannot be altered or deleted, thus ensuring transparency and security for both parties. In addition, any data logged into the public blockchain is anonymous, guaranteeing privacy.

Without a middleman, people can also enjoy lower fees and better interest rates. Anyone can also open a bank account without the need for credentials.

Indeed, with $40 billion of assets currently locked in DeFi, it’s a trend that is likely to impact every aspect of finance.

Open Banking

Open banking is a growing initiative that enables banks to share their data with FinTech firms and other financial institutions. This is done through an application programming interface (API) that connects an app or website to the bank’s database.

Given that banks are traditionally secretive about their financial data, you might ask yourself: why do they agree to this?

The answer, as with anything in FinTech, is—to stay competitive. 

Open banking is a way for traditional banks to provide better financial services and provide their clients with exciting possibilities not available with a centralized approach. 

One of these is account aggregation. This service allows users to view all of their accounts from multiple institutions in one convenient app, thus eliminating the need to log in to each one manually. Good examples include Tink and Plaid.

Taking this idea one step further are personal finance management apps like Mint.

open banking

By centralizing a customer’s financial data in one location, users can manage their finances better. The app can, for example, suggest a recommended budget for the user based on their bank balance, income level, and financial goals.

Financial institutions have a lot to gain from open banking as well. With open banking, lenders can instantly assess a person’s credit risk by accessing their financial records.

This allows lenders to give reasonable interest rates on their loans. On the flip side, borrowers can also quickly compare loan and credit card providers to gauge their chance of approval. 

Autonomous Finance

Autonomous finance is the delivery of personalized, automated financial services through artificial intelligence (AI).

The term “self-driving money” is perhaps the most suitable description for this area of FinTech.

In a nutshell, the innovation enables an app to autonomously create and execute a financial plan based on a person’s goals, risk tolerance, age, bank balances, and other factors.

It’s like an intelligent digital financial advisor that manages your money 24/7.

Say you want to save up $1 million by the end of the year. An autonomous finance app can look at your risk tolerance, then invest in financial instruments that match that. Or, if it finds excess money in your monthly budget, it can invest that amount in assets with higher returns.

The biggest driver for autonomous finance is providing a customer-centric approach to financial services. In finance, as with any other consumer business, excellent customer experience is still king.

But here’s the problem: the average person tends to use multiple platforms to manage their finances. 

For instance, you can pay a bill with Paypal, receive your salary in Wise, and manage your finances using the Chase app. However, dealing with various apps can be tedious and time-consuming, detracting from the customer experience.

Thus, the next step is to integrate everything and automate all of the steps for the customer’s benefit. While it’s still an emerging FinTech trend, it will undoubtedly change how people manage their finances in the near future.

Financial Inclusion

Financial inclusion, as defined by the World Bank, means “individuals having access to useful and affordable financial services that meet their needs.” The goal is that anyone, regardless of financial or social situation, can enjoy essential banking services like saving, payments, and lending. 

People with no access to banking services, or unbanked individuals, are surprisingly common in the developing world. For example, more than 60% of the population of countries like Morocco, Vietnam, and Mexico are unbanked.

The problem is that banking, as essential as it is as a service, is generally geared towards the middle and upper class. Interest rates for loans and savings, for instance, are often better the more money you have.

Fintech solves the financial inclusion dilemma by providing accessibility and ease of use to financial products and education. This, in turn, can help the growth of the economy as a whole.

One example of a FinTech firm that helps with financial inclusion is Kiva. This non-profit crowdfunding microloan platform serves borrowers from underprivileged locations worldwide. 

In addition, digital-only banks like Chime also help financial inclusion with zero fees, increased interest rates, access to digital payments, and ease of opening an account with minimal requirements.

Financial inclusion presents a more altruistic side of FinTech. And with the pandemic causing people to lose jobs and income globally, it’s a welcome innovation.

Biometric Security Systems

Biometrics refers to the use of physical characteristics, such as their face and fingerprints, to authenticate users. The most significant advantage is that biometrics is nearly impossible to bypass, as it relies on data points that are unique to an individual.

The other good thing about biometrics is that it’s already a widespread technology—close to 82% of consumers already have a biometric-enabled smartphone. But the COVID-19 pandemic has pushed contactless payment methods further, and with it, the use of biometrics.


Biometrics is crucial for contactless payments because it speeds up the authorization of transactions.

Instead of pulling out their credit cards or giving their financial information, users can simply do a fingerprint scan to send payments. Not only is it faster, but it’s also safer.

In the future, biometrics will replace PINs and passwords as the primary authentication method. In fact, it’s already going beyond smartphones and into physical cards.

Banks will also increasingly use biometrics for verification procedures like KYC (Know Your Customer) to reduce identity theft.

Mobile Wallets

A mobile wallet is exactly what it sounds like. It’s a digital repository for a user’s payment information such as credit cards, rewards cards, and coupons. It then allows that person to make payments online or in participating retail stores easily.

It’s no surprise that the mobile wallet is a rapidly growing trend, seeing as it’s a fundamental component of the digital payment revolution that accelerated dramatically during the COVID-19 pandemic.

The main driver of mobile wallets is convenience.

As much as 98 million—or 66%—of the 150 million Americans surveyed in a study stated that they switched to a mobile wallet because it’s more convenient.

Compare that to enhanced security, which only 14.8% of respondents claimed was their primary reason for adoption.

It’s also not surprising that millennials and Gen Z are the leading mobile wallet users, with as much as 85% of them having used at least one mobile wallet platform. However, Gen X (at 65% adoption) and baby boomers (at 33%) aren’t far behind.

near field communications NFC technologies

With the vast market potential, mobile wallets is one area of FinTech where the big boys are playing. Most of the world’s leading tech firms, like Apple and Google, have their own e-wallet platforms. 

But China is where most of the action will be. It’s forecasted that almost 50% of the world’s mobile payments will come from the country by 2023, with platforms like AliPay and WeChat Pay leading the charge.

Robotic Process Automation (RPA)

We talked about autonomous finance above, where AI is used to automate financial management for consumers.

But that’s just the tip of the iceberg. The same technology can also be applied to the operation of banks and financial institutions—an innovation called robotic process automation (RPA).

Specifically, RPA can automate high volumes of repetitive, rule-based tasks. 

In the financial world, these include:

  •  Know Your Customer (KYC) verification
  • opening accounts,
  • data input
  • processing client requests
  • customer onboarding
  • loan processing

Fortunately, we don’t need to look too far ahead into the future to see RPA in action.

Bank of America, for example, has Pega Robotic Automation. This AI-powered system executes payments, helps solve mortgage and card disputes, automates customer service tasks, and even enables automation in their obsolete system.

And the results were many and impressive, from shortening customer service call durations by 15% to reducing overtimes and service hours.

Other notable examples include Singapore’s OCBC Bank and its Bob and Zac RPA and Deutsche Bank’s RPA initiative.

Indeed, these are but a few entries in a long list of RPA adopters. So it’s no surprise that the market is expected to double in growth by 2023 and reach universal adoption.

Voice Commands

Using voice commands is a subset of biometrics that uses a user’s voice to authenticate and authorize transactions and other financial app operations.

As with other innovations like biometrics and automation, voice commands technology isn’t something new outside of FinTech. Thanks to the popularity of voice assistants like Apple’s Siri and Google’s Alexa, the number of people using this technology will reach 8.4 billion by 2024.

However, the adoption of voice commands in FinTech is still in its early stages. The biggest concern and roadblock is security, as voice recognition technology is still not as secure as other forms of biometrics like face and fingerprint identification. For instance, most consumers in Germany and Austria don’t trust voice-enabled payments just yet.

Still, some financial institutions are already experimenting or using voice commands in their FinTech initiatives.

The most common is using Siri voice recognition to authorize mobile payments, like what Barclays, Santander, and the Royal Bank of Canada are doing.

But one of the more promising and advanced examples of this technology is BBVA’s Mobile Interactive Assistant or MIA.

MIA provides an entirely voice-enabled experience when executing financial tasks like getting account details, sending money, or exchanging currencies. It’s even smart enough to give personalized suggestions based on the user’s habits.

Voice commands represent one of the more exciting FinTech trends that promise to deliver an even better customer experience. Other potential areas include multilingual text-to-speech for cross-country customer service and speech analysis to gather decision-making insights. 

Fintech-as-a-Service and Banking-as-a-Service Platforms

Fintech-as-a-Service (FaaS) and banking-as-a-service (SaaS) are approaches where firms and banks allow other entities to access their services and products. This is done through application programming interfaces (APIs), smart contracts, or blockchain technologies.

FaaS and SaaS are similar to the Open Banking initiative we discussed before. However, instead of just opening up their data, banks offer their services as well.

These can include payment processingKYC verificationlending, and account management.

The main advantage of FaaS and BaaS, as with other “as a service” approaches like SaaS, is lower cost since you don’t need to develop and maintain the infrastructure yourself. That also means you can bring a FinTech app to market faster.

But the real benefit is mixing BaaS and SaaS services from different firms and banks. This allows FinTech apps to offer a host of amazing features into one convenient package at less cost.

Developing FaaS and BaaS APIs is now a growing trend in FinTech.

Railsbank, for instance, is building an API platform that enables developers to drag and drop financial services into an app just like they would any element.

Other emerging startups focused on FaaS and BaaS include Rapyd and incumbent-focused FintechOS.

It’s an Exciting Time for FinTech

We’ve covered some of the biggest and most exciting trends in the FinTech world. And the fantastic thing is that it’s not even scratching the surface of what this industry has to offer.

One thing’s for sure: after the changes that are bound to happen in the coming years, the financial world will never be the same.

Hopefully, we have given you some inspiration for your next big FinTech idea.

And if you’re interested in the ins and outs of building a FinTech app, we have your next read right here.

Written by

Ante Baus


Ante is a true expert. Another graduate from the Faculty of Electrical Engineering and Computing, he’s been a DECODEr from the very beginning. Ante is an experienced software engineer with an admirably wide knowledge of tech. But his superpower lies in iOS development, having gained valuable experience on projects in the fintech and telco industries. Ante is a man of many hobbies, but his top three are fishing, hunting, and again, fishing. He is also the state champ in curling, and represents Croatia on the national team. Impressive, right?

Related articles