AI Europe

Fintech 2021: What Tomorrow Holds

When it comes to innovation and invention, the fintech sector has always sat right on that cliched bleeding edge, delivering tight and relevant solutions that reshape finance, transaction and customer engagement. Over the past year, the move to solutions that use less physical interaction and allow for remote access and management has seen the fintech sector evolve even further. Now, as the world looks to an uncertain 2021, the experts weigh in on what could possibly lie ahead for the next 12 months. 

Michael Boguslavsky, Head of AI at Tradeteq, believes that AI models will continue to improve and evolve at an ever-faster rate to meet market demand. “AI models that perform the best and are the most reliable are those that have access to more granular data at a higher frequency and from a wider range of sources, and that can use this information with greater accuracy,” he clarifies. It is a view shared by FintechOS: “Banks will finally jump from customisation to personalisation. In 2021, they will wake up and begin operationalising the use of customer data to form actionable insights that inform the customer conversation in real-time.” 

By harnessing AI, data and automation, financial institutions will likely deliver increasingly personalised and seamless user experiences in 2021, while also focusing on the tech that will help reduce operational costs and improve efficiencies. For Rolands Mesters, co-founder and CEO of Nordigen, 2021’s fintech evolution will lie within the realms of open banking and natural language processing. He believes that these two trends are on a collision course and will not only tick the boxes of personalisation but also of more powerful and relevant user experiences. “Open banking is allowing for fintechs to build more powerful user experiences,” he adds. “Currently this is growing rapidly in the US, but we expect this to go mainstream in Europe in 2021. Natural language processing is also progressing and it is likely that fintech companies will adopt this in low-risk areas such as marketing and business intelligence.” 

The biggest trend of 2021 is people. Customer interaction, customer experiences, customer assessments and improved customer services.  “AI is reshaping the industry value chain, enabling more accurate assessments of clients through know your customer (KYC), deep profiling and faster onboarding,” says Alessandro Tonchia, co-founder and Head of Strategy at Finantix. “This will be supported by real-time management of products and portfolios. It is also likely that both big data and analytics will reshape middle and front office operations and reduce costs while allowing less affluent customers access to professional wealth management services.” 

For Declan Fay, VP Strategic Business Development at Mobica, the move towards the customer will also see a rise in the use of non-banking apps for financial transactions and using big data-driven digital footprint tracking to target unbanked customers. Sundara Sukavanam, CDO of Firstsource, adds: “Analytics and ML will also enable Fintech providers and digital banks to deliver powerful banking apps that help customers manage their money. Applied ML algorithms can surface patterns to help customers understand their spending, anticipate issues, manage credit and personal loans more effectively. AI will enable financial service providers to differentiate and add more value to customers.” 

Of course, no commentary around 2021 can exist without a look back at the start of the pandemic in 2020 and how it has influenced behaviour and platform. Adam Lieberman, Head of Artificial Intelligence and Machine Learning at Finastra says: “No financial model could have predicted the black swan event brought about by the pandemic. Existing models will require retraining and updating to reflect the current economic context, thereby ensuring sustainable lending.” He also predicts that there will be an increased usage of synthetic data heralding the rise of a new data boom that will positively impact the maturity of models across the financial services ecosystem and improve data-driven decision making.  It’s a view shared by Hani Hagras, Chief Science Officer at Temenos: “Decision-makers in the sector, as we have begun to see this year, are increasingly accepting the fact that artificial intelligence can be central to delivering the best services for customers. Given the pandemic has shown the advantages of such technology, it is certain that it will become even more widespread across the banking sector.” 

There will also be a continued focus on security as the risks continue to rise in the wake of the pandemic and fresh vulnerabilities found in customer behaviour and technology. For Gavin Ray, Chief Product Officer, Landmark Information Group: “AI is increasingly being applied to support large and highly complex fraud and security functions. The trouble in security is that you don’t need algorithms to find things you know about; you want them to find what you don’t know; the anomalies.  That’s an incredibly hard challenge and all manner of advances in security and AI are coming to address this.” 

As Lubaina Manji, Senior Programme Manager, Open Up 2020, Nesta Challenges, concludes: “In 2021, we expect AI to become even smarter, with more sophisticated chatbots and advanced functionalities – including switching utility and credit providers – as well as fraud prevention becoming the norm. This will improve the accuracy and personalisation of financial services and enable individuals to better access personal finance products, ultimately improving people’s financial well-being and supporting those who are keen to stay on top of their finances during these uncertain times.”



  • Tamsin Oxford is an experienced generalist who has written for finance and tech for more than 20 years. She's written for multiple publications and markets and continues to find the topics both fascinating and brilliant.

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