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Top FinTech Trends to Watch in 2020

Top FinTech Trends to Watch in 2020
Alex Malyshev
Top FinTech Trends to Watch in 2020

FinTech has reached a tipping point. Startups are no longer focused on niche use cases and are beginning to operate at a much larger scale. 

The FinTech sector is now providing services to all demographics across the financial services value chain.

The industry is buzzing with articles about the FinTech trends that will determine the future of financial technology industry. With so many established companies, media organizations, and tech experts sharing their outlook, it is almost impossible to add any unique insights about FinTech trends. 

Instead, this article curated by Pavlo Sidelov, the CTO of, compiles the most important FinTech trends from numerous trusted publications into one place:

  • FinTech Collaboration
  • The Rise of Challenger Banks
  • The Growing Chinese FinTech Ecosystem
  • Hyper-Personalization 
  • Tech Giants Enter FinTech
  • Blockchain
  • The Voice Revolution
  • Reverse Engineering UX 
  • Diverse Regulations

FinTech Collaboration

FinTech companies have redefined the rules of the game for financial services. From low-commission foreign exchange and digital branchless banking to online investment advice and management, products considered new and disruptive in 2015 are now becoming prerequisites for all market players. 

With a technology-forward mindset, FinTech companies offer services that are frictionless, cost-effective, accessible, and transparent. Agile work processes and a design-first approach allow the challengers to outperform the incumbents by providing better rates and improved functionality. 

These characteristics are sufficiently appealing to customers and pose a significant disruptive threat to banks, wealth managers, and insurers. The incumbents that respond to this competitive threat will either form partnerships with FinTechs, acquire them, or develop their alternatives in-house.

With so many players already offering similar competitive services, each incumbent must strive to find new ways to attract and retain customers, whether by price, brand, or timely execution. 

Partnerships with FinTechs are going to become more widespread as banks begin to modernize their services. Instead of lengthy updates of their outdated IT stacks, some incumbents will hand off the management of their legacy systems to third parties. 

Read more about FinTech trend FinTech collaboration: Wharton, Bank innovation, Finextra.

Top FinTech Trends to Watch in 2020

Sources: BCG, McKinsey, Deloitte. ATOS infographic. 

The Rise of Challenger Banks

This is one of the main FinTech trends in 2020. The Great Recession broke a sense of trust in traditional financial institutions and the government that oversaw them, but it also gave rise to challenger banks. FinTech innovators earning for transparency developed the new generation of digital-first banks that are agile, cheap, and stable.  

Today, there are more than 75 challenger banks around the world, and many of those are now in a position where they can seriously compete with traditional banks. While customer preferences have changed, the majority of traditional banks have not. Legacy tech, outdated infrastructure, and high fees make incumbents vulnerable to disruption. 

Customers no longer need to choose a bank closest to them with a brick-and-mortar branch as the majority of banking operations can be carried out online. According to analyst estimates, 30% of US bank branches are now redundant. Challenger banks not only offer digital-first user interfaces, superior online services, and transparent pricing but features that cater to new customer needs. 

For example, 56% of millennials feel as if their financial goals are out of reach and 55% don’t have enough money to make ends meet. To address this, FinTechs have added tools that track and categorize transactions, set and monitor spending goals, and help to budget effectively all within a single platform. 

Even other nonbank FinTech platforms are expanding their product range – like Robinhood and Acorns, who recently added high-yield savings accounts. Furthermore, challenger banks are rapidly expanding beyond their local markets and now operate in multiple countries across the world. 

According to McKinsey, new players can capture from 10 to 40 percent of incumbent banks’ revenues by 2025. Banks that fail to react to FinTech challengers may see a significant drop in profits. At the same time, financial institutions that leverage new tech to enhance their operations, CX, and business models can unlock extraordinary opportunities for growth.

Combined with multiple useful integrations with payment and insurance providers, challenger banks are becoming more attractive to not only tech-savvy millennials but mainstream customers as well. 2020 is going to be the year challenger banks reach their full potential. 

Read more about the FinTech trend of challenger banks: Forbes.

The Growing Chinese FinTech Ecosystem

In 2018, China’s mobile payments industry, estimated to be worth $6.8 trillion, eclipsed the country’s yearly retail sales of $5.5 trillion. In the same year, China was the largest FinTech market in the world in terms of investments. According to Accenture, the value of FinTech deals was $25.5 billion, which accounted for 46% of all Fintech investments around the world. 

Before rapid economic growth, Chinese financial services were not well-developed. This opened up an opportunity for tech companies to leapfrog over traditional banking systems. As a result, the majority of Chinese customers rely on unique transaction models built around smartphones. 

The extremely valuable mobile payments market is dominated by Ant Financial’s Alipay with a 53.8% market share and Tencent’s WeChat Pay with 38.9%. While Western players tend to focus on single markets, the Chinese tech giants have built super apps and comprehensive ecosystems around their respective payment services. 

However, the success of the Chinese FinTech adoption was marred by multiple P2P lending scandals. Ezubao, a now-defunct P2P lender, defrauded $7.6 billion from 900 thousand investors, and Shanghai-based Shanlin Finance swindled over $9 billion before authorities broke it up in 2018. 

Following the collapse of the scam-ridden segment, Chinese authorities are cracking down on FinTech regulation. This year, they are planning to introduce 17 standards for FinTech categories, including AI, cloud services, and blockchain. Although the regulators are promising to bring order and security, the changes are going to curb innovation for smaller players in the market. 

The Chinese FinTech market is a unique example of what opportunities and problems FinTechs may run into as the market becomes highly integrated. Going into 2020, China is expected to continue to influence the FinTech world significantly, and it is worth taking note of. 

Read more about FinTech trends Chinese FinTechs: Appinventiv, Wharton.


Processing, storing, and generating insights from consumer data will be even more critical FinTech trend in 2020. Thanks to artificial intelligence (AI) and big data, FinTech companies can rely on processed data to attract and retain new customers by personalizing their offerings. 

According to a recent report, 94% of banking firms could not fulfill the “personalization promise” in 2018. Meanwhile, 64% of SMEs are interested in personalized money management advice for cash flow, invoicing, and financial planning that will allow them to improve their business decision-making process.

Top FinTech Trends to Watch in 2020

As a trusted provider of core banking software to financial institutions, we at recognize the importance and benefits of this trend. That’s why we made hyper-personalization our primary priority in product development for this year, comments Pavlo Sidelov, the CTO of

Whether it is insurance, wealth management, payments, or lending, FinTech companies can leverage AI and big data to generate customized financial services to fulfill otherwise unmet needs. AI-based workflows can discover new client groups, streamline risk management, and drastically cut down compliance costs.

Autonomous FinTech products are promising to have a significant impact on 2020 with: 

  • Personalized credit offers with lower fees that take multiple data sources into account and get approved in seconds rather than days.
  • Personal finance assistants monitor individual goals, like paying off student loans or saving for retirement, and suggest the best time and method to do so.
  • Robo advisors automatically balance asset portfolios based on real-time market conditions, set goals, and designated risk profiles.

Tech Giants Enter FinTech

With Apple launching a credit card with Goldman Sachs, Google gearing to roll out checking accounts this year, and Facebook trying to drum support for Libra, FinTechs will be competing with Big Tech in 2020. 

The biggest tech companies are leveraging their top developer talent, vast monetary resources, and a great deal of consumer data to capture an even greater market share and keep customers locked into their platforms. 

However, with Big Tech already under scrutiny over the handling of consumer data, disrupting the highly regulated financial services industry is not going to be easy. 

One thing’s for sure, with the top tech companies entering the market, the new year is going to bring further product launches, partnerships, and lucrative acquisitions.

Useful Blockchain

2019 was an excellent year for blockchain. Technology is coming close to having a tangible impact on real-world problems, and the world’s governments are paying close attention. 

The introduction of the Lightning Network last year paved the way for instant blockchain-based cryptocurrency transaction settlements. Not only does this layer-2 payment protocol increase transaction speeds, but it also decreases the associated charges. 

As the year goes on, we are going to see the emergence of more nodes, channels, and applications that are going to take market efficiency to a new level. 

With the increase in concerns over the security and privacy of transactions within the market, some companies have responded with new privacy tools. EY, for example, has developed a new set of protocols called Nightfall to make transactions over the Ethereum ecosystem completely private. 

2020 is going to see better regulations, higher adoption rates of crypto derivatives, and better growth of the digital ecosystem with new exciting opportunities for FinTechs worldwide. Most importantly, this is the year blockchain matures as a technology. 

Read more about blockchain FinTech trends: Hackernoon, Coindesk.

The Voice Revolution

In a very short time, voice-enabled services have become a phenomenon. Google Assistant is available on more than 1 billion devices, and Google’s competitors have hundreds of millions of users worldwide.

65% of smart speaker owners are comfortable making purchases with their voice, and 43% use their devices to shop. With voice purchases becoming more conventional, the volume of transactions made with smart assistants is going to surge. 

As voice assistant systems become more closely integrated with banks, shops, and P2P payments, the more personalized the user experience is going to become. In 2020, we are going to see the emergence of voice assistants for banks, lending, and collections. provides a Voice Banking solution – a process that allows a person to log in and manage banking operations using natural voice commands instead of endless taps and clicks. Customers can speak to the authentication system that can recognize unique markers and almost instantly confirm and authenticate their identity. Read more about the voice revolution FinTech trend here.

Reverse Engineering UX  

As the FinTech market becomes more saturated, it is important to remember that users need products that will fulfill their needs. It may seem straightforward, but the conventional approach is to start with backend development and then try to convince consumers that they need the product. 

Reverse engineering is a top-down approach that aims to reduce the risk of failure by maximizing the benefits for the users. The process starts with UX research to determine the most effective way to deliver value to customers. The design stage materializes the look and feel of the product. Only then can the best architecture be determined. 

Starting with UX and ending with product development ensures that users get the most value out of the product. 

This approach is the driving force behind some of the most demanded FinTech products out today. Although it often requires dramatic changes in business practices, reverse engineering pays off with user satisfaction and growing demand.  

Diverse Regulations

FinTech adoption worldwide will face several hurdles in 2020. In some regions, FinTechs can face significant pushback not only from incumbents but from diverse regulatory stances as well. 

Europe’s Open Banking and PSD2 regulatory initiatives have encouraged innovation and competition within the EU but contributed to a rapidly shifting market at the same time. While PSD2 requires banks to open up their data through APIs, Open Banking forces financial institutions to release data in a standardized form to facilitate sharing between authorized third parties.  

With access to banking information through APIs, licensed FinTechs and financial institutions will be able to offer personalized services to participating consumers. However, the idea of open banking has been overshadowed by fears over the security and privacy of personal data. 

The success of FinTechs in Europe will, at least in part, depend on how well the new regulation is adopted throughout the region in 2020. 

The U.S. FinTech market is also facing significant setbacks. In October 2019, a federal judge ruled that the Office of the Comptroller of the Currency (OCC), did not have the authority to issue banking charters to FinTech startups. As of January 2020, the OCC is planning to launch a “FinTech charter” that would enable FinTechs startups to offer loans and payment services. 

Singapore and Hong Kong regulators are encouraging innovation with digital-only bank licenses for FinTech startups. Meanwhile, Vietnam’s Cybersecurity law that came into effect in January 2020 restricts cross-border data flows, limiting FinTech startups to storing data only in Vietnam.  

Regulations in Latin America and the Caribbean (LAC) are largely fragmented with diverse stances between neighboring countries. Mexico has enacted the FinTech Law, which offers legal guidelines for FinTech companies. Brazil has also been proactive with new regulations that allow FinTechs to provide P2P lending services. 

Other countries in LAC have been slow to respond and provide little to no regulatory guidelines for FinTechs. According to an IDB and Finnovista survey, about 45% of the LAC’s entrepreneurs consider current regional regulation very loose or non-existent. 

FinTech in Africa is mainly growing without significant regulatory pushbacks. Primarily because African TechFin startups are bringing millions of people into the financial system with offline payments and innovative solutions. 

Conversely, South Africa is taking an active part in encouraging innovation. Back in 2018, the South African Reserve Bank established the Financial Technology Programme to work closely with the latest FinTech developments. 

Bright Future for FinTech

There is almost no doubt that 2020 is going to be a big year for global FinTech. Even with challenging regulatory barriers, FinTechs have expanded beyond their local markets and continued to disrupt incumbent institutions with innovative products. 


Top FinTech Trends to Watch in 2020
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