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The shape of financial services and fintech in 2020

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As we move into a new decade, the world of finance is changing faster than ever. What does the future have in store?

The financial services industry and the fintech sector do not stay still for long. In this decade, the 2010’s, we have seen unparalleled change, which will influence the type of roles being recruited for in the future.

  • Mobile banking means we all have a bank in our pockets – wherever you have a cellular signal, you can look after your money; from Central London to Central Africa.
  • We have seen the demise of physical money – cash made up only 28% of payments in the UK in 2018.
  • Blockchain and Bitcoin were virtually unknown in 2010; now they are household names.

The pace of change is showing no signs of slowing as we enter the 2020s. The trends we identified above are sure to continue. Here are five more things to watch out for in 2020.

1 – Fintech goes mainstream

As influential as fintech has been this decade, the companies leading the disruption have usually been small startups or scaleups. Large banks have sat on the sidelines, occasionally making purchases to keep themselves agile.

Expect to see this change as we move into 2020. Large institutions such as JPMorgan and Bank of America are growing their technology teams and registering more tech patents in a drive for a competitive edge. VCs are investing more money than ever into fintech startups.

Then, there are the tech giants eyeing the sector with a view to dominating, as they do with every other marketplace they enter. Apple is launching a credit card; Amazon is offering loans. Not to be outdone, Facebook wants to start its own currency.

2 – Millennial money is power

If this decade saw the coining of the term ‘millennial’, the next one will see millennials become the most sought-after demographic in the market. For fintech companies, the successful ones will be the ones that help millennials achieve their goals, the dreams they are currently struggling to fulfil:

  • Owning property
  • Financial independence
  • Starting a business

Millennials’ needs are different from those of older societal groups. They also want to be treated differently when it comes to customer service, communication and purchasing.

The same is true in our industry, recruitment. In 2020, millennials will make up 35% of the workforce. The most successful recruitment companies will be the ones that cater best to millennials, appealing to their desire for personal development in employment, mobile communication and flexible working.

3 – Carrying on the conversation

64% of people in the US would rather communicate with their bank using messages rather than emailing or talking on the phone. Sure, it’s less personal, but it’s also less rigid and more convenient. This has led to a proliferation of AI-powered chatbots on financial services websites and mobile apps, ready to help customers find the answers they need.

The next frontier for our communication is voice. People go to their Alexa or Google or Apple speaker now when they want to know something. It’s no surprise that banks are looking at these technologies as a new way of serving their customers. Several financial companies in the US are experimenting with Alexa skills to display account balances. Time will tell if we are truly ready to send money to each other using a smart speaker.

4 – AI and automation

AI isn’t only used to power chatbots. It can be used across the financial services industry to get repetitive jobs done quicker, fight fraud and even make decisions on things like loans. This allows banks to offer a more streamlined experience to their customers, increasing efficiency and improving performance. It also frees up the people that used to do these repetitive tasks to spend their time serving customers in a way that only a human can.

In recruitment, AI is also making its presence felt. AI can help with candidate sourcing and matching, as well as the interview process. It can help reduce unconscious bias, but also analyse if a candidate’s words are betraying their real motives. AI looks destined to take over all aspects of our lives in the next decade; if you’re building a recruitment business, make sure you’re on board.

5 – Regulation and security

OK, it’s not the most glamorous side of fintech, but it’s nonetheless essential. After all, people won’t use these disruptive new technologies if they cannot trust them. Regulation and security are essential if fintech is to achieve critical mass.

This situation has led to a whole new branch of fintech developing around regulation, ‘Regtech’. The aim of Regtech is to allow financial institutions to run all their necessary compliance measures as quickly and efficiently as possible. An example would be machine learning tech that makes complying with Anti-Money Laundering (AML) regulations more effective. Previously, these tasks were quite labour intensive, so anything that can automate these processes comes with a potentially significant ROI.

Cybersecurity is also one of the biggest challenges financial services institutions face. It is tech that will help them keep one step ahead of the cybercriminals.

Find out more

Those are just five of the trends that are coming our way in the next decade. There could be more that we don’t even know about yet. Being aware of what’s around the corner ensures we’re better prepared to respond to the changing hiring needs of our clients, as well as the career aspirations of millennials.

Are you set to take advantage of the opportunities that innovation in the financial services market brings? We’re looking for current or future business leaders that want to scale their own financial recruitment business in 2020. Is this you?  We can assist you in setting up your own recruitment business, or help you scale your existing business to a highly profitable exit.

If you want to find out more about capitalising on these significant market trends, let’s talk. Fill in the form below to start the conversation.

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Recruitment Entrepreneur is a global investor in early to mid-stage recruitment businesses

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