Top 5 Banking and Fintech Trends For 2021

The coronavirus pandemic has accelerated the advancement of digital banking and Fintech. As the demand for digital finance solutions has skyrocketed, new trends are emerging. Technology is helping speed up improvements in the finance world, just as it is in other industries.

If you are in the finance industry or are curious to learn about what to expect from 2021, you have come to the right place. This post takes a close look at the top 5 banking and Fintech trends for this year.

Each trend will inform you about what to expect. So, what are you waiting for? Let’s dive in.

1. Micro-Services

One of the hottest banking and Fintech trends for 2021 is micro-services. They are helping power the Fintech revolution. Without micro-services, it would not be possible for the Fintech industry to grow and compete with the existing financial services. 

The thing about micro-services is that they help provide Fintech with the flexibility required to create groundbreaking, innovative technology. This flexibility provides the industry with much-needed agility to adapt to competitive forces and changing circumstances.

Monolithic systems are built using one code to create a single unit. The entire architecture has to be changed if the need arises as the platform is highly interdependent. Hence, making them obsolete as customized technology is the need of the modern financial industry.

Micro-services have been introduced as a solution as they offer greater flexibility. They offer a unique technology proposition. As they allow the development of independent applications, it is possible to meet specific business requirements. 

Micro-services are expected to make it big because they help address common issues such as scalability and speed. They also support continuous delivery and testing. Their responsiveness and agility enable the industry to provide customers with the best experience.

2. Artificial Intelligence and Machine Learning

Another banking and Fintech trend that you need to know is artificial intelligence and machine learning. Many services, such as digital marketing services, have benefited from AI and MI. Hence, it is about time that the finance sector followed suit. 

From regulatory technology to robot-advisers, AI/ ML systems enable companies to better monitor customer behavior and detect opportunities and anomalies. The financial players of the future, like Fintech companies, would rely on data scalability.

Unlike traditional banks that treat customers as an aggregate, Fintech companies provide a highly customized, personalized service by combining technology and human skills in the best way possible.

Some of the areas where AI/ ML will prove effective include regulations and policy, algorithmic trading, banking chatbots, and fraud detection. Banks can benefit from the technology as it helps with countering terrorism financing and anti-money laundering.  

3. Decentralized Finance

A trend that has been gaining traction is decentralized finance. It focuses on using emerging technology for revolutionizing the industry. The main purpose of decentralized finance is to find favor. It operates outside the stereotypical financial structure to provide out-of-the-box solutions. 

With decentralized finance, intermediaries are eliminated, and finance is effectively democratized for the majority. Since a huge percentage of the population does not have access to finance, decentralized finance aims to bring a change and make financing accessible.

The best thing about decentralized finance is that it operates outside the stringent financial framework. It provides financial services to the masses by removing investment, payment, and bank intermediaries. Instead, it replaces these with services that are powered by a blockchain network.      

Blockchain provides an effective alternative. It will continue to disrupt the financial ecosystem to ensure security and transparency while removing the reliance on established financial service providers. Blockchain relies on smart tokens and contracts to act as the digital middlemen needed to transfer money.

Ivan on Tech reported that the market for decentralized finance is expected to grow by 10 times compared to the previous year. Growth has been exponential, which means that it is a trend that is likely to continue for years to come.    

The sectors that are expected to be most affected include insurance, financial data, asset management, decentralized exchanges, and lending. 

4. Predictive Analytics

In addition to the above, predictive analytics is also a banking and Fintech trend that will take 2021 by storm. As cyber-security continues to be one of the biggest challenges that the financial industry faces, predictive analytics will play a huge role in helping prevent fraud and strengthen cybersecurity measures.

New entrants and small players can take advantage of predictive analytics to gain an edge over bigger corporations. Machine learning, algorithms, and big data are used by predictive analytics for analyzing and assessing the likelihood of future events based on customer behavior. 

Predictive analytics is powering the future of data science. The Fintech industry is utilizing the technology for scalable, efficient, and cost-effective outcomes.

Besides, predictive analytics also helps the industry improve customer experience, identify ways employees can add value, and improve operations.

Capacity modelling is just one of the things that predictive analytics can do. According to research, predictive analytics will continue to innovate and find new ways to detect and manage problems before they even arise.  

5. Financial Health Becoming Political

Finally, it is impossible to ignore financial health becoming political. It is a trend that more and more people are focusing their efforts on. In 2021, financial health will be a huge concern due to 2020 being a difficult year for businesses and consumers alike.  

The Fintech industry has already discussed financial health issues in detail. However, the government is filly catching up by demonstrating their contribution towards a better future. Low-income customers will be the main priority for this year. 

New programs are expected to be launched by the financial industry and the government to help customers gain access to financial products to ensure that everyone’s financial needs are addressed.

Besides, customers are expected to demand their rights due to an increase in issues such as employment security and an unstable economy. Hence, there will be many challenges this year.


The banking and Fintech industry is experiencing exponential growth. This year will see significant change. From the introduction of micro-services to financial health becoming political, there is a lot to expect. 

The good news is that 2021 is the year of customers. Their needs will be addressed by the financial sector and the government. Hence, they have the most to gain. 

Author Bio: 
Arslan Hassan is an electrical engineer with a passion for writing, designing, and anything tech-related. His educational background in the technical field has given him the edge to write on many topics. He occasionally writes blog articles for Dynamologic Solutions.  

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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