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Leading Financial Trends of 2021

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On December 23, 2021,December 23, 2021 , In Business

Credit: Photo by Visual Stories || Micheile on Unsplash

The impact of 2020 is seen in the leading financial trends of 2021. Beyond fintech itself, the way people are turning to digital options for nearly every aspect of their personal and professional lives makes for interesting trend data. From shopping and investing to remote work and decentralised banking, the pandemic has had a permanent influence on the relationship between technology and the financial market.

In this All Finance Tax blog, we look at five of the major financial trends to know for 2021 and beyond.

Five Trends To Know About

  • Blockchain & Cryptocurrencies
  • Advanced Payment Technologies
  • Neobanks & Start-Up Banking Services Go Mainstream
  • Diversified Investing
  • E-commerce Explosion

Blockchain & Cryptocurrencies

2020 was a record year for cryptocurrencies thanks to the economic, political and social upheaval of elections, the pandemic and recessions. In the wake of mass job loss and welfare payouts, many people turned to cryptocurrencies to invest rather than put their money in stocks. With support from Twitter’s Jack Dorsey and Tesla’s Elon Musk, cryptocurrencies haven’t just mainstreamed ‒ they’re now being viewed seriously as an alternative to fiat currencies. Blockchain has boomed at the same time as this technology has helped with swift software innovations in the fight against Covid-19. As the backbone to a huge swathe of health and securities technology, it’s no surprise that worldwide spending on blockchain solutions is tipped to hit $6.6 billion USD this year.

Advanced Payment Technologies

Technology is now a foundational part of our daily routines and diverse payment options are a part of everyday life now. There are countless forms of advanced payment technologies and it’s hard to remember a time before Afterpay let alone contactless payments or being able to transfer funds directly to a friend’s mobile number. Covid-19 restrictions actually escalated advanced payment technology at an even faster rate than previously predicted and consumer habits play a major role in how the industry is evolving, too. While the pandemic forced the shuttering of many brick-and-mortar businesses and a push for card-only payments, it’s crucial to note that overall consumer behaviour was already going in this direction. Consumers were already opting for remote or cross-border purchases, click and collect, and payment installment technologies to securely shop in line with their personal preferences. More widespread digitisation and onboarding with new payment gateways across all industries means advanced payment tech will be a key trend in finance for the foreseeable future.

Neobanks & Startup Banking Services Go Mainstream

Disrupting traditional industries is an overriding feature of the last two decades of business. It was only a matter of time until entrepreneurs turned to the banking space. The emergence of neobanks, unique financial services and personal fintech providers with low fees, app-based infrastructure and robust business models has caused waves in the industry. Europe is somewhat of a haven for fintech innovation due to the range of regulatory advantages in the region. Developing products and expanding quickly is a key feature of these digital-only banks and services that, according to CompareRemit, are viewed as a real threat to old guard banking institutions. CompareRemit outlines the appeal of their value proposition saying, “What sets Neobanks apart from traditional banks are the innovative features and simplified processes including account opening in minutes, free debit cards, instant payments, lower prices, cryptocurrencies, peer-2-peer transfer, mobile deposits, mobile-budgeting tools, user-friendly interfaces, and more.” Most customers are now using a mix of existing brick-and-mortar banking in conjunction with neobanking and startup financial services so it’s likely that the post-pandemic recovery period will be central to how Monzo, Revolut, Wise and more continue to grow.

Diversified Investing

Investment habits are dramatically shifting due to Covid-19-related employment uncertainty, market inflation and diverted discretionary spending. The concurrent boom in cryptocurrencies and soaring global property markets paint a compelling picture about today’s investment patterns. Currently, the approach to investing is remarkably different to preceding years and many experts predict that the future is extraordinarily precarious. There is ongoing cynicism when people are making their individual financial decisions as bulging government debts and fears of an impending recession are leading many to look for opportunities to bulk up their emergency savings and liquid assets. While bolstering personal security is logical in the short-term, there’s another angle to this in terms of investing for an unpredictable future. One key departure of generational investment aspirations amongst millennials is how their sense of social responsibility is guiding them towards sustainable stocks also known as ‘green funds’. A recent report found that 60% of millennials said “the pandemic has increased their appetite for sustainable investments”. From any number of angles, the pandemic and climate change concerns look set to drive investment choices well into the decade.

E-commerce Explosion

Consumers are a major influence in finance whether it’s driving the payments technology used, boosting the logistics and fulfilment space, or surges in sub-industries of the global retail market. Statista calls e-commerce “an indispensable part of the global retail framework” and projects that digital shopping will account to just over one fifth (21.8%) of worldwide retail sales in 2024. Of course global e-commerce activity grew in 2020 with the closure of non-essential retail plus the challenges in distribution and disruption to supply chains. Yet in the current phase of recovery, e-commerce still has a starring role as businesses use it to stay afloat and we all rely on it for digital progress to maintain global momentum. As touched upon in the second trend of Advanced Payment Technologies, e-commerce is an industry that tends to influence innovation in other sectors and it can also help communities support small businesses. The United Nations has begun addressing the need for “inclusive benefits from e-commerce” across developing countries and, amid the backlash towards the market dominance of multinationals like Amazon, e-retail may be as beneficial to smaller businesses as billion-dollar companies.


Interested in learning more about these topics? In previous blogs, we’ve analysed Bitcoin and Taxes, reviewed the most popular Financial Podcasts, and explained EU Digital Tax.

Or, perhaps you’re looking to speak with an expert about wealth management. Contact us and let our Wealth Management Consultants help you with our personalised service.

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