The concept of fintech has seeped into multiple layers of society as several organizations have dabbled in the latest technology. One of the main reasons for this rapid adoption was the promise of seamless transactions and a quickfire ecosystem.
As 2020 comes to an end, it becomes imperative to look back at the changes that the financial industry underwent over the past year. There were organizations on both sides of the spectrum, as some made it big while the rest did not live up to raised expectations.
The organizations that made a niche for themselves by utilizing fintech’s key selling points such as speed and a hassle-free experience. One of the biggest winners in this surge was Stripe with sources stating that the next round of investments may value the company at a whopping $100 billion. The coronavirus pandemic was one of the main reasons for the payment service’s boom as users jumped on board ordering everything at home.
Stripe recently talked about its latest Treasury feature which will:
“Enable platforms like Shopify to offer merchants access to financial products. Platforms can offer users interest-earning accounts eligible for FDIC insurance and enable customers to have near-instant access to revenue earned through Stripe, and then: 1) spend it directly from their balance with a dedicated card, 2) transfer it via ACH or wire transfer, or 3) pay bills.”
Another winner in the fintech race was Chime as the company continues to remain a market leader in customer retention. Customers have early access to their money on Chime, a feature that has garnered the attention of the masses. Chime also offers features such as Spot Me where customers can make overdrawn debit card purchases without any overdraft fees. While the aforementioned organizations made a killing in the past year, institutions such as credit unions took a major hit.
Places like credit unions relied on the support of customers and how much they were willing to accept its dated offerings. Once a leaner system came into view, credit unions suffered due to a lack of participation from customers. A study conducted in January showed that at least 14 percent of US customers relied on credit unions, a number which shrunk to 10 percent this month.
A major disappointment in the fintech sector came in the unlikely form of Robinhood. The company, which was set to change the way payments were conducted, became embroiled with the SEC for failing to disclose important information. Analysts expect 2021 to be the year fintech establishes itself as a major player in the mainstream financial industry.