‘Tis the season for every fintech news outlet to cite industry predictions for 2020. And while it’s helpful to know that AI is still the biggest trend since PFM, and that the bank of the future will get ahead by focusing on the customer, sometimes the best way to gauge new trends is to think on a smaller scale.
Examining these micro trends helps keep a finger on the pulse of what’s about to take off in fintech and cuts the noise of the glaringly obvious ideas that dominate headlines. Here’s a look at a few of those trends.
Workplace training and compliance
These types of solutions have two main drivers, new technology and new regulation. Both of these factors continue to move at a fast pace throughout financial services.
Solutions such as Horizn help employers train their employees to use new consumer-facing technology so that they are ready to answer questions from end clients. By using gamification and leaderboards, Horizn encourages employees to increase their knowledge about new tools and offerings. Similarly, Launchfire’s Lemonade is an interactive, game-based simulation approach to workplace learning and helps employees not only learn skills they need to share with their customers but also familiarize themselves with compliance regulations.
This second piece of Launchfire’s offering– the compliance training– is key because it is increasingly evolving. This is due in part to employees expecting a more interactive training experience and partially because new technology is driving regulation to change at an increasingly fast pace. Christina Luttrell, COO of IDology highlighted this in a discussion about Europe’s General Data Protection Regulation (GDPR), which took effect in 2018; and the California Consumer Privacy Act (CCPA), which will begin enforcement on the first of next year.
“According to IDology’s Annual Fraud Report, 28% believe CCPA compliance will be more burdensome than GDPR,” Luttrell said. “If GDPR is an indicator of how CCPA will unfold, then businesses need to consider how criminals can and will exploit subject access requests.” With regard to CCPA specifically, there is a lot at stake for non-compliance. “With consumers being able to sue, the compliance risk is enormous,” Luttrell added.
Debt management, specifically student loan assistance platforms, have already started to take off. Players such as Tuition.io, Student Loan Genius, and CommonBond offer workplace benefits that enable employers to contribute to their employees’ student loan debt repayment efforts.
Direct-to-consumer debt repayment apps such as Qoins, which allows users to contribute their spare change from everyday purchases toward their debt, and Changed, which uses the same “spare change” concept but is focused on student loan repayment, are less common.
The coming year will bring even more of these types of solutions, especially as third party applications become more commonplace in financial services.
While there won’t be a huge wave of new players in the debt management space (again, we’re thinking micro trends!), it’s likely that existing players will launch new solutions to help consumers manage not only their student loan debt, but also mortgages and personal loans.
We first saw an emergence of philanthropic fintech around 2012 when Billhighway launched fundraising technology and CafeGive, which has since shuttered, powered multiple financial institutions’ community-focused giving promotions.
Newer examples of philanthropic technology include Betterment’s donation feature and Meniga’s collaboration with the UN that allows users to donate their cash-back rewards to fight climate change. Additionally, Radius (recently acquired by Kabbage) launched its Data for Good campaign to help the company’s employees and customers give back to their communities, and Revolut launched a charitable giving feature. And there are even fintechs devoted entirely to charitable giving, including Place2Give, Sustainably, and Pinkaloo.
Could charitable donations via “feel good fintech” begin to take the place of tax deductible donations – especially in the U.S. – in 2020? Philanthropic fintech is also partially driven by the convenience economy. For example, instead of sitting down to make a yearly donation to their favorite charity, consumers can support the organization on a regular basis through the deduction of their “spare change” on everyday purchases or investments.