Aiga Senftleben from the fintech Billie about changes accelerated by Covid-19 and their impact on the industry
Again, the 20s. Again, the world is upside down. While economists predict we will slide into the deepest recession in 100 years, the stock markets are booming. Uncertainty looms large. So where are we headed? Are the stock market bulls right with their bet on an even brighter near-term future? Or the ivory tower Cassandras, with their gloomy warning that all hopes for continued technological progress and growth are nothing more than a dead cat bounce?
Let’s take my own industry – Fintech – as an example to cut through this noise and identify the fundamental trends that will shape the decade. I’ve seen three major trends that are now accelerated significantly through the Corona outbreak. These three trends impact B2C and B2B business models alike but have arguably an even bigger impact on the latter.
Trend 1: Financial services will largely move to the point of sale – offline and online
The rise of Apple and Google Pay defines the blueprint for a more general shift in the way that customers demand access to financial services. Customers will demand financial products that integrate seamlessly into their regular routines and experiences. Take credit as an example: Access to loans will no longer happen separately on a bank’s website or even inside a bank branch, it will take place in high street stores and web-shops, at flea markets and on online marketplaces, wherever people buy and sell.
Trend 2: Financial services will become entirely real-time
When financial products are sold embedded at the point of sale, customer approvals need to happen in real-time. This is a huge challenge for an industry that is known for complex and lengthy onboarding experiences due to heavy regulation. Similar to traditional banks, Fintechs need to perform detailed checks to prevent money laundering and fraud. To do so in real time, Fintechs need to tap into a multitude of external databases such as commercial and public registries. They need to integrate with a large number of third-party providers such as identity services, accounting platforms, bank data aggregators, etc.
Trend 3: Financial services will create more SaaS-like experiences
While it will remain important to provide standard financial products such as loans or savings accounts, customers will ask for more embedded add-on services. Instead of just having a bank account, customers want to have a bank account that helps them to manage their expenses. Instead of just looking for liquidity, customers demand a holistic working capital management system that streamlines their entire finance flow from payment matching, to dunning and dispute handling.
Aiga Senftleben is co-founder and general counsel at the German fintech Billie, which is an automated-invoicing platform for businesses. Before founding Billie, Aiga gained expertise within the fintech industry at PayPal and the Funding Circle, amongst others.