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By Volodymyr Marchuk, Cloud and Solutions Architect at Eleks

According to a recent Deloitte report, the pandemic has been “reshaping the global banking industry on a number of dimensions, ushering in a new competitive landscape…prompting a new wave of innovation, recasting the role of branches, and of course, accelerating digitization in almost every sphere of banking and capital markets.”

To illustrate the point, a recent survey by the DeVere Group found that, since COVID-19 struck, the use of fintech apps has increased by an unprecedented 72%. This rise has been driven by the increase in usuage of, for instance, contactless payment apps and other digital banking tools necessitated by the pandemic. But it’s more than a passing phase. In fact, another recent survey of US households found that up to 67% of people plan to stick with digital banking technologies long after the coronavirus crisis ends. Let’s review the top five fintech trends of 2021.

Five fintech trends that look set to redefine the finance and banking sector

  1. Digital-only banks

Digital banking is a popular and preferred method of money management for many—and has been since before the pandemic struck. But digital-only fintech services that negate the need to stand in lengthy queues at physical banking locations have gained real ground since.

Digital banking encompasses services like P2P transfers, cryptocurrency sales, contactless payments with free transfers, and international remittances. And big innovations in this area will continue to make it easier for people to take care of all their banking needs; anytime, anywhere. It’s predicted that the number of people visiting physical banks will decline by up to 36% between 2017 and 2022.

Arguably the most important aspect of digital-only banking, however, is its potential to reach a wider demographic than has ever been possible before. According to a recent World Bank report, there are still up to 1.7 billion people without access to the global banking system. So the significance of opening up access to essential financial services cannot be underplayed.

  1. Blockchain and decentralised finance

Being one of the most pivotal technologies to emerge in recent years, Blockchain is listed among the fintech trends with the greatest potential. Its applications for the financial industry are huge. Blockchain solutions have effectively enabled a banking revolution; instigating a move away from traditional centralised procedures to safer, fairer, decentralised finance.

Blockchain offers a decentralised ledger of end-to-end transactions which, once automatically entered, cannot be manipulated in any way. The benefits of blockchain for the fintech industry are manyfold, including:

  • Transparency – blockchain gives financial regulators access to the ledger, fostering a fully transparent culture between financial institutions, and between banks and regulating bodies.
  • Instant settlements – where settlements have previously taken up to a week, with blockchain they can take seconds. This will save all involved parties a vast amount of time and money.
  • Reduced counterparty risks – instant settlements mean that there’s far less danger of counterparties failing to meet their financial obligations.
  • Smart contracts for better contractual performance – smart contracts with incorruptible business rules will improve term performance since they automatically kick in once defined parameters are met. This will be especially beneficial for complex financial asset transactions.
  • Reduced error handling and reconciliation – blockchain provides an immutable transaction ledger with a clear and real-time audit trail. As such, there’s far less room for error or tampering.
  • Better capital optimisation – blockchain can significantly reduce operational costs for the financial sector since it removes the need for intermediaries such as custodian banks and clearers 
  1. Public cloud

A report by the International Data Corporation (IDC) indicates that investment in public cloud infrastructure and services will have doubled between 2019 and 2023—with the banking sector accounting for roughly a third of spending.

Driving the move toward a cloud-based model is the growing prominence of open banking, which is gaining ground thanks to its ability to provide greater transparency. Agile fintech disruptors favour the cloud because it allows them to foster collaborative partnerships with developers. And large banks are now getting on board with the public cloud model because it supports a range of Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) solutions. Additionally, public clouds offer greater levels of security, meet a wide range of compliances requirements  and enhanced level of security.

Furthermore, operational challenges brought about by the pandemic mean that financial institutions and banks have little choice but to rely more heavily on cloud-based solutions from here on out.

  1. Hyperautomation

Digital process automation or “Hyperautomation”, a modern term coined by Gartner will be a key part of this digitization. Gartner defines hyperautomation as “the idea that anything that can be automated in an organisation should be”. It’s driven by the need to streamline what is, for the majority of businesses, a disjointed hotchpotch of new and old systems and processes which aren’t efficient, agile or synchronised. 

As its name suggests, hyperautomation describes a deep level of digital autonomy; the process of automating end-to-end business operations to unburden human workers, optimise efficiencies and reduce costs.

Hyperautomation isn’t a single entity. It comprises multiple different technologies, connected via the Internet of Things, which work in unison to enable end-to-end automation. Here are the key elements:

  • Robotic process automation (RPA). RPA describes the process of harnessing technologies such as bots to take over manual tasks that would normally be performed by humans. RPA has been adopted by a variety of sectors and, as a fintech solution, has the ability to streamline operations, reduce the human burden of repetitive tasks and greatly improve banking efficiencies. This will speed up and reduce the cost of many of the time-consuming back-end processes involved in running a financial institution, such as account maintenance, new customer onboarding and credit processing.
  • AI and ML are the next steps on from RPA, whereby computers are able to simulate human intelligence, and this unlocks a far deeper level of automation than RPA alone. With these technologies, innovative fintech businesses can automate financial decision-making and save their customers valuable time. AI and ML are also enabling fintech firms to harness Big Data, to find meaningful patterns in customer behaviour that can lead to smarter financial decision-making. With this new intelligence, they can effectively tailor their products and services to match consumer desire.
  • Intelligent business process management approach combines business process management (BPM) software with the capabilities of artificial intelligence (AI). This is really the linchpin of hyperautomation. IBMP describes software which has the ability to manage the switch to a hyperautomated environment. It is a strategic tool which handles the processes, strategy and workflow involved in enabling end-to-end automation – and to monitor the results so that issues can be resolved. For example, automated investigation and resolution of any discrepancies between the finance teams and other departments via e-mail messaging.

Many banks that we are talking to are already using robotic process automation (RPA) and cognitive intelligence technologies. This means that manual tasks can be automated 24/7 with limited human supervision. We are seeing improvements in data quality and human workers are able to be redeployed to higher value tasks. However technologies such as RPA may not be the complete solution  for end to end regulatory reporting and that is where hyperautomation will come in but this may take time. Complete automation is often complex and can take years to implement requiring a transformation in the culture of a business. In addition, hyperautomation can significantly reduce financial losses due to fraud, accidents, and errors. 

In a digital landscape that’s moving at hyperspeed, hyperautomation offers businesses the right tools to optimise and future proof their operational processes. However, hyperautomation is complex and is not an over night solution. The key for banks is to focus on activities that can be automated in the short-term while continuing to adapt to increasingly complex regulatory reporting requirements and implementing innovative new technologies.

  1. Enhanced security

According to research from Crowe and the University of Portsmouth’s Centre for Counter Fraud Studies (CCFS), in 2018 global losses due to fraud were calculated to be  5 trillion USD (6% of global GDP). It’s predicted that cybercrime will cost $6 trillion US dollars, globally, by the end of this year (2021). 

Given the nature of the information held by financial institutions, it’s unsurprising that cybersecurity represents one of the biggest focuses for the sector moving forward. In fact, the financial industry is one of the top three targets for cybercrime, accounting for around 10% of all annual attacks.

According to a recent Deloitte report, up to 64% of banking businesses are expected to plough investment into combating cybercrime in 2021 and beyond.

With the aforementioned rise in cybercrime, financial innovators are having to think of new and infallible ways to protect their customers’ sensitive financial data. Passwords are coming under increased pressure from evermore advanced criminal technologies, and this is why biometric security measures are the next logical step in safeguarding financial security. This not only has the benefit of being far more secure than a password but it’s also much easier for the customer. Instead of having to remember endless combinations of letters and digits, and answer multiple questions to access things like telephone banking, they can gain access to their accounts simply by using their biometrics. It also benefits the banks by making authentication quicker and more efficient, and enabling them to remove certain human touchpoints.


Almost every industry has been forced to rethink traditional business models in the wake of the COVID pandemic. And many, including the finance sector, will never look the same again. If we’ve learnt anything from the events of 2020/21, it’s that agility and flexibility are the keys to business survival. Financial institutions need to flex their models to support remote operations while adopting the latest fintech trends to innovate their offerings and to enable tailored, on-demand banking services for the masses.


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