# Fintech trends to look out for in 2021
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-12-14
Category: Uncategorized
Category URL: https://financedigest.com/category/uncategorized
Meta Title: 2021 Fintech Trends: Consolidation, Funding, eCommerce
Meta Description: Explore the trends driving growth in the fintech industry. From acquisitions to eCommerce, find out how small businesses can thrive in the digital age.
URL: https://financedigest.com/fintech-trends-to-look-out-for-in-2021html

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_By **Scott Donnelly,** CEO, CapitalBox_

It has been a big year for fintech, and 2021 will without doubt be another massive year for growth. In recent years we have seen the fintech sector embrace digital transformation with open arms, however 2021 has quickened this development more than ever due to the COVID-19 pandemic.

As our environment picks up pace and we are forced into a flexible working environment, progress in new technology, like acritical intelligence and machine learning are offering new possibilities, especially to new [small businesses](https://www.financedigest.com/reasons-to-obtain-iso-9001-certification-for-small-businesses-in-australia.html "Reasons To Obtain ISO 9001 Certification For Small Businesses In Australia") who are testing the waters in the sector. This has brought a flurry of change into the [fintech industry](https://www.financedigest.com/how-fintechs-are-supporting-the-hospitality-industry.html "How fintechs are supporting the hospitality industry") as a whole.

Such change in 2020 has [created](https://www.financedigest.com/entrepreneur-investor-dale-w-wood-shares-how-he-is-using-his-funds-to-create-change.html "Entrepreneur & Investor Dale W Wood Shares How He Is Using His Funds to Create Change") fertile ground for change and innovation in 2021, which will be a year characterised by expansion through partnerships, technology and consolidation.

**1\. Acquisition by larger players**

2021 will be a year for consolidation in fintech. We [expect the leaders](https://www.financedigest.com/what-is-expected-of-leaders-in-the-age-of-automation.html "What is expected of leaders in the age of automation?") of large companies to progress in acquiring smaller players. This will be partially evident in more mature areas, such as lending, alongside [emerging areas of the financial market](https://www.financedigest.com/autonomous-vehicles-market-emerging-growth-analysis-future-demand-and-business-opportunities-2026.html "Autonomous Vehicles Market Emerging Growth Analysis, Future Demand and Business Opportunities 2026") like blockchain. For start-ups, consolidation can fuel and scale international growth and also help them to rebuild themselves, and their [balance sheets](https://www.financedigest.com/ecbs-villeroy-lays-out-plan-for-shrinking-balance-sheet.html "ECB’s Villeroy lays out plan for shrinking balance sheet"), after a challenging year. Consolidation offers [small businesses](https://www.financedigest.com/government-assisted-financing-schemes-for-small-businesses.html "Government Assisted Financing Schemes For Small Businesses") a golden ticket to every aspect of the financial services ecosystem.

Take CapitalBox’s recent acquisition of Spotcap Global, one of the most recognised [online lenders in the Dutch market](https://www.financedigest.com/australian-regulator-to-probe-amazon-com-ebay-and-other-online-markets.html "Australian regulator to probe Amazon.com, eBay and other online markets"). This consolidation has allowed Spotcap [Global to grow its business](https://www.financedigest.com/cup-holder-market-emerging-industries-challenges-and-threats-faced-by-key-vendors-and-global-business-outlook-till-2031.html "Cup Holder Market Emerging industries, Challenges and Threats Faced by Key Vendors and Global Business Outlook till 2031") through the combination of expertise and technology, solidifying a strong market position and translating into better funding options for Dutch SMEs.

**2\. [Private equity and venture capital funding](https://www.financedigest.com/private-equity-funds-approach-italys-serie-a-to-explore-media-rights-deal-sources.html "Private equity funds approach Italy’s Serie A to explore media rights deal -sources") are set to rise**

[Private equity](https://www.financedigest.com/private-equity-so-much-more-than-just-money.html "Private equity – so much more than just money") and venture capital are perfectly placed to take advantage of an economic downturn. For investors skilled enough to act on the dry [powder in the market](https://www.financedigest.com/powder-dispenser-market-market-2019-2029-where-should-participant-focus-to-gain-maximum-roi.html "Powder Dispenser Market Market (2019 – 2029) | Where Should Participant Focus To Gain Maximum ROI "), we expect a top buying opportunity for reasonably priced corporations in 2021 – especially as there is a considerable amount of institutional investor money sitting on the side-lines right now.

According to BDO’s Private Capital Pulse Survey, private equity and [venture capital](https://www.financedigest.com/breaking-down-venture-capitals-gender-and-diversity-barriers.html "Breaking down Venture Capital’s gender and diversity barriers") managers share the same optimism, with only 15% saying they expect the economy to worsen in 2021.

**3\. [Fintech and eCommerce](https://www.financedigest.com/how-fintech-is-becoming-the-driving-force-of-ecommerce.html "How FinTech is becoming the driving force of eCommerce") work hand in hand**

With more payment options available, from mobile to pay-later, the eCommerce space has already got a taste for the profits that modern financial [technology](https://www.financedigest.com/how-advanced-self-service-technologies-are-changing-the-face-of-finance.html "How Advanced Self-Service Technologies are Changing the Face of Finance") can bring, and there is only more to come. In a [world that is growing more digital](https://www.financedigest.com/six-reasons-why-digital-world-classtm-finance-organizations-outperform-peers.html "Six Reasons Why Digital World ClassTM Finance Organizations Outperform Peers") by the minute, the COVID-19 driven surge in eCommerce is unlikely to fully subside even when rules are relaxed. The use of chatbots, biometrics and blockchain tech have revitalised the [customer experience](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments") for good, therefore in 2021 fintech companies that facilitate, assist or fund eCommerce transitions will be thriving.

**4\. [Businesses must](https://www.financedigest.com/a-taxing-issue-ten-tax-invoicing-pitfalls-that-international-businesses-must-avoid.html "A taxing issue: Ten tax invoicing pitfalls that international businesses must avoid") turn to eCommerce tools**

Many small [businesses have had to learn to digitise and sell online](https://www.financedigest.com/benefits-of-instagram-ads-agency-melbourne-for-online-business.html "Benefits of Instagram ads agency Melbourne for online business") during this difficult time in order to survive. A [report released by Adobe shows COVID-19 has massively enhanced the growth](https://www.financedigest.com/amino-acids-market-trends-size-share-growth-forecast-report-2025.html "Amino Acids Market Trends, Size, Share, Growth Forecast Report 2025") of eCommerce with a 77% rise, an increase that would have otherwise taken 4-6 years. Therefore, we expect [rapid growth](https://www.financedigest.com/tissue-diagnostics-market-set-for-rapid-growth-by-2030.html "Tissue Diagnostics Market Set for Rapid Growth by 2030") in SME eCommerce tools as businesses prepare for the future. To be eCommerce 2021 ready, organisations must prioritise the use of external tools, like [digital payment](https://www.financedigest.com/why-anti-spoofing-fingerprint-technology-is-essential-for-the-continued-growth-of-digital-payments.html "Why anti-spoofing fingerprint technology is essential for the continued growth of digital payments") process systems and analytics tracking platforms, that can handle the dynamic environment caused by the coronavirus pandemic. Without these, small players run the risk of getting left behind as a result of a [weak consumer](https://www.financedigest.com/britains-ms-warns-of-gathering-storm-of-higher-costs-and-weak-consumer.html "Britain’s M&S warns of ‘gathering storm’ of higher costs and weak consumer") experience.

**5\. Brexit will create optimism for multilingual companies**

The US has some really big fintech players and in the UK, there are a lot of [businesses in the space albeit small to medium sized](https://www.financedigest.com/covid-19-is-impacting-the-variable-speed-drive-market-size-business-revenue-forecast-leading-competitors-and-growth-trends-2028.html "COVID-19 Is Impacting The Variable Speed Drive Market | Size, Business Revenue Forecast, Leading Competitors And Growth Trends 2028"). The real opportunities in fintech however, [come from targeting smaller countries rather than large markets](https://www.financedigest.com/veterinary-tables-market-rise-to-meet-large-demand-in-coming-years-fact-mr-study.html "Veterinary Tables Market Rise To Meet Large Demand In Coming Years, Fact.MR Study").

With markets such as the US and UK, companies tend to trade internally as it is easier than getting to grips with multiple languages, currencies and regulations. The latter are difficult to deal with, but if your fintech business can [navigate multiple regulatory](https://www.financedigest.com/how-to-navigate-multiple-data-privacy-regulatory-frameworks.html "How to navigate multiple data privacy regulatory frameworks") ecosystems, then there are some serious opportunities to take, like having a bigger presence across the globe.

[Brexit will be a benefit for continental fintech](https://www.financedigest.com/brexit-the-risks-to-the-city-and-fintech-have-never-been-greater.html "BREXIT: THE RISKS TO THE CITY AND FINTECH HAVE NEVER BEEN GREATER") players next year, as it will add more regulatory hurdles for companies looking to enter the market. However, it will be even harder to establish as a fintech in the UK. To get past this, the UK Government needs to connect players in the UK to larger players in the [environments it wants to expand to and find a way to work](https://www.financedigest.com/the-benefits-of-creating-a-great-working-environment.html "The Benefits of Creating a Great Working Environment") together.

2021 will [see a noticeable increase in the pace of change and adoption of technology for the fintech space](https://www.financedigest.com/bae-systems-sees-big-opportunity-in-space-after-uk-satellite-bolt-on.html "BAE Systems sees big opportunity in space after UK satellite bolt-on"). With such bold developments in the pipeline, [next year](https://www.financedigest.com/uaes-adnoc-to-open-swiss-trading-office-next-year.html "UAE’s ADNOC to open Swiss trading office next year") looks to be another exciting one. We expect to see fintech help to get our economy back on its feet [post COVID-19](https://www.financedigest.com/how-ecommerce-went-from-surviving-to-thriving-in-a-post-covid-19-world.html "How eCommerce went from surviving to thriving in a post Covid-19 world"), with a large focus on tech adoption, used to help businesses rebuild and grow again. The likes of AI, [blockchain and cryptocurrency becoming commonplace in businesses](https://www.financedigest.com/the-real-potential-of-web-3-0-and-blockchain-for-business.html "The Real Potential of Web 3.0 and Blockchain for Business") show a promising start to 2021.


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