On Deck for FinTech 2021

Increased Tech Spending and Focus on Digital

Journal of Financial Planning: February 2021

 

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You can’t look to the future without looking backwards. Last year gave us the world’s first large-scale global pandemic since 1918. And as a result, the technology landscape for planners and clients alike changed.

As Dani Fava told us in the Q&A in this issue, the pandemic forced us all to adopt digital technology, from shopping for groceries online to buying insurance online. It forced planners who had long resisted adopting technology to finally do so—a “silver lining” as Fava says.

According to Wealth Management’s article, “5 Trends for Planning FinTech’s Next 5 Years,” among the top trends coming down the pike are: increased spending on technology for firms to keep up with their competition and focusing on clients’ digital experiences. Finance Digest reports the cryptocurrency debate and acceptance will continue, and Biz Tech Magazine notes AI use will continue to expand.

Increasing spending on technology to keep up. Wealth Management, citing research from F2 Strategy Research, noted that firms plan to increase their spending this year in order to keep up with their competition.

Focusing on the digital experience. Wealth Management noted that in the coming year, firms will increasingly offer digital experiences for clients—and those clients will be more diverse and be from all over the world.

Will Bailey, chief strategy officer of InvestCloud, writes in Financial Planning that among his clients, existing digital client engagement rose more than 30 percent in 2020.

“Digital transformation starts with the user and must be geared around what the user can see and do—the client experience,” Bailey wrote.

Digital currency debate rages on. Investopedia recently reported that Facebook is gearing up to potentially launch cryptocurrencies—including Diem and Novi—as the buzz around digital currency continues into 2021. CNBC reported in a recent article that cryptocurrency will began to gain more mainstream acceptance as companies like PayPal increasingly allow users to buy and sell Bitcoin on its platform. But volatility remains and industry publications look forward to seeing how the cryptocurrency space will evolve.

AI use expanding. In line with enhancing digital experiences, the use of AI will continue to expand into 2021, allowing firms to offer more personalized services to their clients. It will also enable firms to offer more personalized marketing to help clients find what they need more efficiently.