2020 was a year of huge change, with a global pandemic, government stimulus checks, and an immediate need to switch to a more digital way of life. On the tail end of this past year, banks and credit unions will need to adjust to the new reality, the aftermath of Covid-19 and how the global economic forecast will impact this year’s growth. Consider the following trends and ideas for your financial institution this year.
FinTech has been on our radar for some time, and now organizations on both the banking side and the FinTech side are becoming more sophisticated about how they can work together. In the coming year, we’ll particularly see innovations in:
Payroll Fintech. Organizations will partner with FinTech companies to develop creative financing options for payroll, including options such as loans, advances, and other payment or savings systems built into their payroll framework to better serve employees without any more effort from employers.
Filling Gaps Between FIs and and FinTech Organizations. FinTech systems need to have proper access to work with banks and credit unions, and these financial institutions need to have their core systems set up in a way that FinTech organizations can work with. Historically, this has been a barrier to smaller banks and credit unions utilizing FinTech services, but we’re now seeing organization help to fill that gap and develop creative solutions for these smaller players.
Additionally, banking as a service organizations are helping banks flip the script for FinTech companies, treating these FinTech organizations as the client and providing them the banking services they need to have a platform and base for their services.
A Transition Out of Covid-19
Without getting too carried away, 2021 looks promising for the deployment of vaccines for Covid-19 and a tentative loosening of restrictions as the year progresses. With this in mind, small businesses will be assessing damage they incurred in the past year and thinking of ways creative financing and a prospective uptick in business can help them stay afloat and begin the recovery process. Financial institutions should be open-minded and come up with creative ways to think about small business loans to help those organizations in need and fill a much-needed gap.
Additionally, Covid-19 has change the way America interacts and does business, namely in terms of an explosion of digital and contactless interactions. Financial institutions should take stock of their digital transformation, see where they stack up in relation to competitors, and work to understand how their customer base has shifted behavior in the past year.