Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Why 2020 Is The Year For Fintech

Why 2020 Is The Year For Fintech

This month marked one of the largest fintech acquisitions of all times, Visa’s purchase of Plaid for $5.3 billion. It is a validation of fintech in a literal sense – Plaid is a key enabler to many of the leading fintech players, and critical in simplifying the onboarding flow and integration of players. It may also be a bellwether for the year: 2020 may be the year for fintech.

Four important and interlocking trends will drive this.


1. Fintech is yielding mega rounds and successful exits

Plaid is not alone. While historical fintech acquisitions have been smaller, early signs indicate incumbents have a growing appetite for larger deals. The last couple years have seen an acceleration of large fintech acquisitions and funding rounds. For example, Paypal completed its largest ever acquisition, Honey for $4 billion.

Incumbents have also been active: Charles Schwab purchased TD Ameritrade for $26 billion. Infrastructure players, “Fiserv Inc., Fidelity National Information Services Inc. and Global Payments Inc. did a series of deals that transformed payment processing in the U.S.”, according to a Bloomberg analysis. There of course have been some recent IPOs as well, notably Bill.com’s at approximately $1.6 billion.

The pipeline of fintechs is growing too. The quarterly funding for fintech has been on the rise over the last few years (excluding the exceptional Ant deals). In 2019, there were over 59 mega rounds, defined as over $100m, globally (and this is only to Q3).

This is set to continue. There are an increasing number of fintech funds, and mainstream funds where fintech is part of the allocation. As a result, we will see an acceleration of ever larger innovators and ultimately (hopefully) large successful exists.


2. Fintech is maturing and providing a more holistic solution for customers

The rebundling of fintech has been part of the narrative for some time. Challenger banks are one of the most direct manifestations of this phenomenon by placing themselves closest to a customer’s money and paycheck, providing intelligent insights for financial health and connectivity to best in class fintech products.

In 2019 Challenger banks had a blockbuster year and raised over $3b (over a billion of which in Q3), including for instance Chime’s most recent $500m round (disclosure the fund I work for is an investor). Today, there are 75 challenger banks around the world. They will fight to acquire users and to scale.

Challenger banks are not the only players to rebundle. A range of fintech players are expanding their product range – for example Robinhood and Acorns who recently added high yield savings. And of course, many incumbents are looking to create digital first offerings and this will accelerate as well.


3. Fintech’s globalization is accelerating

There are now leading fintech innovators scaling around the world. One of the largest digital banks in the world is Nubank, based in Brazil. The most famous mobile-banking player is in Kenya. The largest payment and insurance innovators are in China, Ant and Zhong An respectively.

The rise of global fintech deal activity has accelerated. In Asia for instance, deals spiked last year, and nearly overtook the US according to CB Insights. South East Asia saw a record over 80 deals and over $700 million invested (up from $125m in 2016). Africa saw deal volume double from Q3 2019 yoy.

Importantly, fintech is becoming more global itself. ideas that originate in some locations are being improved and evolved elsewhere by others. A more recent phenomenon is the number of fintech players that are scaling across borders.


4. Fintech is causing incumbents to react

Fintech is going mainstream. According to the Global Fintech Adoption Survey, staggeringly in 2019, 96% of survey respondents were aware of at least one fintech service. 75% had used a money transfer or fintech product. The report rates adoption at 64%, 4x the rating in its first year of publication in 2015. Fintech is no longer fringe, it is mainstream.

This is driving behavior change among incumbents. For instance, as Robinhood scaled, we’ve seen incumbents change their business models and offer fee-free trading, for instance Schwab and TD.


2020 may be the year of fintech

Combining these trends presents a powerful future for fintech. Fintech exits are becoming proven. More capital is being poured in to support the next wave. Fintech’s scale is affecting incumbents industry wide. This is not just happening in the US, but globally. And of course, fintech solutions are becoming more harmonized in customer facing ways, as challenger banks demonstrate.

Plaid’s acquisition in that way, as both a key enabler in fintech, and a powerful example of the value they create, is a bellwether for the industry.
#ANT 
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×