2020 Changed FinTech — What Will 2021 Bring?
With so many new developments in the financial technology industry this year, here are three that show growth potential in the new year.
2020 will be remembered as the year where Covid-19 crippled global economies and industries. However, the global pandemic actually helped financial technology to boom.
Businesses, merchants, consumers, and financial institutions alike learned to quickly adopt new technologies due to restrictions placed on movement and gatherings.
People couldn’t commute to the office for work, yet businesses still had to run. Trips to the supermarket were restricted, yet families have to eat. Students had to stay at home, yet learning still had to be done in order to sit for mid or year-end exams. Not forgetting that more people now needed financial services such as loans but they needed it more urgently and with a lower barrier to entry.
Due to this unprecedented global crisis, the uptake of FinTech in the past 12 months has been phenomenal. Let’s take a look at three ways financial technology has changed in 2020, especially the ones that will likely grow further in 2021.
Mobile Payment Apps
As people spend more time on their handphones, the use of mobile payment apps boomed. Payments are swift, and the apps are easy to use oftentimes only requiring a receiver’s handphone number for the transaction.
2021 will likely see more people asking, “Can I pay via Venmo/ Apple Pay/ Google Pay?” instead of doing a bank transfer or credit card payment.
When unemployment became the norm for 2020, many who suddenly found themselves unemployed urgently needed funds to service existing loans or afford daily expenses.
Traditional channels of obtaining money have barriers to entry such as good credit history, high value collateral, minimum loan amount or border restrictions.
Thus, lending apps running on blockchain technology became an alternative choice.
The advantage of such lending apps is that no loan amount is too small, and digital assets such as game tokens, digital design or art, or cryptocurrencies can be used as collateral for the loan.
What ensures compliance on these FinTech lending apps is the use of blockchain technology that ensures transactions are transparent, immutable, and secure.
As the global economy shows little sign of recovery for 2021, more people will discover that digital lending apps are their best option for easily and quickly obtaining funds, even if they don’t have a good credit history.
While the value of fiat currencies and gold falling as the global pandemic dragged on, more people turned to cryptocurrencies as a form of investment.
Although crypto is still susceptible to fluctuations in value, these are mainly caused by demand and supply by owners of these currencies.
The absence of centralised control by a government as well as limited supply means that cryptocurrencies cannot be devalued by inflation.
This is a huge appeal for financial investors who prefer to HODL their crypto for a higher valuation.
As the information about crypto currencies is more widely available, financially savvy individuals will see the long term advantages of adding a mix of BTC and altcoins to their investment portfolio in 2021.
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About Plutus Capital
Plutus Capital is backed by a FinTech system built on a public blockchain, where an individual can enforce greater control of his own funds. The Plutus blockchain and token rely on the tamper-proof nature of ledger as well as smart contract and validation to ensure all processes are safe and secure.