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COVID-19 is a black swan event, affecting every region of the world significantly during H1’20. Widespread efforts to contain the virus have driven a significant shift in both customer and business behaviors, a shift that has affected many sectors, including fintech.

In our still uncertain world, here are our top predictions for fintech in H2’20.

This article is featured in Pulse of Fintech H1’20.

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Acceleration of digital trends


COVID-19 is driving a major shift in customer behaviors — with a rapid increase in the use of digital payments models and online product and service channels. It has also shifted how businesses operate, with many accelerating investments in digital channels and related enablers in order to meet customer needs. This acceleration will continue to drive fintech investment geared toward succeeding in the ‘new normal’.

Rise of platform business models


Platform companies and large tech companies will continue to brand into financial services areas, like payments, to broaden their service offerings, provide seamless services to customers across their digital ecosystem, and drive expansion into new markets.

Fintechs moving into adjacencies


In order to better compete and gain additional market share, mature fintechs will continue to expand into adjacencies to drive more customer value.

Strategic deal activity from corporates


There will be increasing fintech investment from corporates, not only in customer-orientated digital technologies, but also in the back office space as a means to improve operations and better manage costs.

Consolidation


With many early stage fintechs struggling to attract continued funding, H2’20 will likely see increasing consolidation among fintechs, in addition to increasing acquisition activity as opportunistic investors look for deals.

Governments focusing on fintech regulations


Governments across the globe will continue to focus on regulation, whether customer privacy, open banking, or the issuance of new licenses. While much of the regulation will be to keep consumers safe, it will be increasingly used to foster fintech investments and encourage sector growth.

  

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