As 2021 draws to a close, it’s safe to say that this year has been full of ups and downs. With the world very cautiously emerging from the global pandemic, one thing has remained constant: the innovation and growth the fintech industry continues to bring. While the year has been a whirlwind for most, the fintech sector has seen many challenges and opportunities that will no doubt continue into the next 12 months.
This December, The Fintech Times is asking industry leaders for their ‘View from the Top’ to gain an insight into the decisions behind the last 12 months. Today, we hear from Anthony Oduwole, Jason Howard, David-Jan Janse, Rohan Amin, Yinglian Xie and Alastair Douglas on their 2021 thoughts, plus a look ahead to 2022. Will there be a Happy New Year? Read on…
Anthony Oduwole, CTO at Verto believes 2021 highlighted financial inclusions issues, particularly in SMEs.
He said: “2021 has unveiled the fact that SMEs across the world are grossly underserviced by traditional financial services. Covid-19 has exposed the financial fragility of many small businesses, yet as we’re coming out of the pandemic, what’s becoming abundantly clear is that banks and the current system is not adequately set up to help these businesses reach their full potential.
“SMEs are the backbone of the world’s economy, representing a large share of all businesses and employing the vast majority of the population in any given country. Their contribution to GDP is disproportionally larger when compared to larger corporates, yet they often face a subpar service and much greater costs, especially when looking to conduct business internationally.
“The fintech sector has done splendidly at picking up the responsibility and offering a vast range of financial services specifically tailored to SME’s needs, spanning insurance, lending or cross-border payments. Fintechs have attracted large numbers of new customers by offering innovative solutions to businesses who have no means or need to purchase large tech or financial products and services.”
Jason Howard, Executive Vice President at Ethoca‘s thoughts revolve around e-commerce growth and mobile banking applications.
“We’ve seen e-commerce continue to grow, but in 2021, we also saw a diversification of that growth and blurring of the lines between in-store and what we think of as ‘traditional’ online shopping. Click-and-collect, curbside pick-up, QR code payments and even mobile ordering apps have opened the door to more hybrid shopping experiences, where purchases are facilitated by both e-commerce channels and in-person interactions. And these options aren’t likely to go away anytime soon – with 68% of consumers more likely to prefer brands that offer convenient and easy digital experiences.
“As shopping experiences diversify, fraud and customer engagement strategies will need to diversify with them. We see a big trend towards more collaborative solutions that share key purchase details between merchants and financial institutions to help prevent fraud and chargebacks, and also create more transparent digital cardholder experiences.
“On the chargeback side, if a purchase is reported as fraud or disputed by a customer, issuers can alert merchants in near real-time for them to respond to it directly. This normally involves stopping an order or service and refunding the purchase, effectively preventing the need for a chargeback altogether.
“Overall, a shift to more collaborative technologies will help businesses more quickly and effectively address the changing fraud and experience landscape.”
CEO of SurePay, David-Jan Janse thinks Covid -19 has accelerated “significant transformation in the payments industry.
He continued: “The pandemic had a massive impact on how consumers make payments, forcing the environment to digitise faster than anticipated. With an increasingly digitised payment landscape, came the ability for online fraudsters to capitalise on the increase in online activity. These criminals turned to online and technology-enabled scams, managing to capitalise on the pandemic by impersonating delivery companies, sending fraudulent texts about Covid-19 vaccines and lockdown fines, among others.
According to UK Finance, Authorised Push Payment (APP) scams cost consumers £355.3 million in the first half of 2021 alone, for the first time overtaking cards fraud. This year has never been a more important time for technology to evolve in order to combat the rise in fraudulent activity; new payment solutions and technology needed to undergo a significant transformation in order to protect businesses and consumers in this increasingly digitised and vulnerable space.
“We can only assume that fraudsters will continue to become more sophisticated, tailoring scams to fit consumers’ changing lifestyles with the increase in real-time payments, payment requests, and users new to digital security. When it comes to digital payments, ensuring that all genuine transactions are processed efficiently whilst avoiding fraudulent ones is a constant battle.
“The payments sector needs to be at the forefront of technology and innovation going into next year. We believe that by the end of 2022, we’ll begin to see an enhanced payment system that delivers a frictionless experience, whilst promoting and developing new and existing technologies in order to greatly improve the ease of use and security of online payments for both consumers and businesses. This will have a positive impact on fraud and misdirection and ultimately also leads to lower operating costs, greater efficiency and higher customer trust.
Yinglian Xie, CEO and co-founder, DataVisor, agrees that fraud has been a hallmark of the year.
She said: “In 2021 we’ve seen organised fraud operations continue to evolve as the fintech industry embraces new technologies like real-time payment. Fraudsters pull in huge sums of money for a successful campaign, providing significant motivation for them to innovate in response to the latest industry defences. Immense amounts of stolen information are easily available for purchase and allow precise targeting of systems anywhere in the world. Today’s fraud operations leverage first-time logins and legitimate user behaviour, demonstrating an impressive understanding of existing defence mechanisms.
“In 2022, the arms race between fraudsters and fraud detection systems will ramp up, with an increased emphasis on advanced machine learning to manage the massive scale at which many of the most sophisticated attacks occur. Unsupervised learning will become increasingly important as fraudsters leverage the massive amounts of available data and attack multiple connected industries in concert. Powering these machine learning systems requires enriched data to train and make them effective in the real world. Accurate individual models aren’t effective if they don’t work in conjunction with the rest of the platform or interfere with the instant results that customers expect. As a result, we’ll see an increased focus by the industry on honing machine learning models to make them transparent and trustworthy.”
Rohan Amin, Chief Product Officer at Chase thinks personalisation will continue to be key in banking moving forward.
“This year, as individuals across all segments of our society continued to navigate the pandemic, we were forced to examine our day-to-day behaviours more closely. This included how we bank and achieve our own—highly personal—financial goals.
“Consumers and business owners will demand more personalisation, leading to hyper-personalised features within their banking apps based on real-time dynamic signals about every customer’s needs and profile. At Chase, we are hard at work to reach this objective across all our businesses.
“It’s also critical that companies design experiences that help customers solve their problems with clarity and confidence, especially in a market crowded with alternatives. Chase has reorganised into a design-driven, product-focused organisation, deepening the collaboration between product, technology, data and design teams. This helps us rapidly deploy new, enhanced digital features that are designed to be both beautiful and functional.
“Further, technology will continue to bridge the gap between physical and digital experiences. Customers have been engaging more digitally with us than ever before, but they continue to rely on personal connections with their banker and advisor. Many also want to do things on their own, which is why self-serve options will continue to evolve, giving customers the ability to confidently achieve their goals by using their mobile app.”
Alastair Douglas, CEO of TotallyMoney believes fintech has been a force for good these past 2 years.
“2020 caught the world off guard,” he said. “With the Financial Conduct Authority finding 31 per cent of adults had experienced a drop in household income, while classifying an additional 2 million Brits as financially vulnerable. The various lockdowns accelerated digitisation, but it’s been 2021 where we have seen a real transformation in the role of ‘fintech for good’ in reaching those vulnerable consumers. From the development of tools to support financial wellbeing, manage debt and create better financial habits through to instant fraud alerts and accelerated insurance claims, huge strides have been made to adapt and progress. We saw the continued development of predictive analytics, paving the way for even greater leaps forward when it comes to helping consumers with risk analysis and championing financial wellbeing.
“All this, at a time when consumers have likely needed these innovations more than ever before in
their lifetime. However, there is much more to do here. YouGov research has shown that Fintech
audiences are generally still in the higher income brackets. So, there is a huge opportunity – and a
responsibility – for the industry to actively focus on more marginalised audiences rather than have
these benefits as a by-product. This is when fintech for good will become fintech for everyone.
This article is part of our 2021 December series, View from the Top, to see others like it and our special edition from December 2020, please click here.
