What does financial services have in store for us in 2019?

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2019 is already in full swing and the festive break has quickly become a distant memory. While the year is still young, Prepayment solutionsleading European provider of digital banking and payments, forecasts what 2019 could hold for the world of financial services and fintech.

Blurred lines between challenger banks and big banks

Challenger banks acquire banking licenses and start providing the same types of services and features as the big banks (both in B2B and B2C spaces). With banks like Monese offering borderless banking services, Challenger Banks will be ready to compete with traditional banks in what is shaping up to be an eventful 2019. on the market. However, the differentiation between these two types of institutions will always be there, and the banks that will continue to succeed will be those that play to their strengths.

Challenger banks will acquire a larger share of the B2B market

Recent success stories such as Monzo and Starling have increased awareness of the capabilities of challenger banks. Consumers are now placing more trust in alternative banking methods to meet their needs, and in 2019 we will see this spill over into the B2B space. Solutions provided by Tide, Countingup and Coconut will gain traction by demonstrating how banking services can be complemented with other features, especially those needed by small businesses, such as bookkeeping or tax reporting.

The financial services ecosystem will become more rounded

We’re starting to see different types of service providers teaming up to offer more comprehensive banking packages – for example, short-term, smaller-value lenders teaming up with challenger banks to reach a wider audience. We’ll see a lot more of that in the coming year, creating mobile, dynamic and responsive offerings that are greater than the sum of their parts.

Ethical banking will increasingly become a differentiator

Monese is focusing on the 140 million people in Europe who don’t have a bank account, Monzo is helping people with no address get a bank account, and MoneeMint has secured funding to provide services to underserved communities. Ethical banking will become a differentiator for more socially conscious customers, and traditional banking institutions will struggle to offer credibility in this space compared to newer banks.

The Attack on Travel Money

Consumers are still quite traditional when it comes to using money abroad, with many travelers preferring to take cash on vacation. However, this behavior is constantly changing, with 14% of individuals using prepayment cards in 2017 – a 6% increase from 2016. We believe cashless money solutions will become even more popular with holidaymakers in 2019. Providing the ability to add funds to the card throughout the year before the holidays will allow Britons to better budget for the best holiday experience. Thus, convenience, security and the best rates will become more obvious and attractive to everyone.

Retail B2B growth will remain strong

According to UKGCVA figures, the sector grew by 10.99% last year, with a significant increase in B2B sales which rose an impressive 18.26%. We can largely attribute this spike to an increase in self-giving thanks to innovative campaigns such as “#Gift Better”.

Likewise, alongside online shopping, there was a strong trend towards personal gifts in 2018 – from trips to fun and experience days. Playing a significant role in increasing brand engagement, consumers are more focused than ever on ‘creating moments’ and ‘creating memories’. Social media influencers and celebrity brand ambassadors are a big part of this, as their product and service recommendations, promotion of the latest trends, and shared experiences continue to flood social media feeds. Throughout 2019, we expect to see these popular B2B and online consumer trends continue.

Mobile and Cloud Scaling Faster

It is difficult to know exactly what new paytech and fintech solutions will emerge in the next twelve months. But it’s probably a safe bet to predict that cloud-based solutions that provide cost-effective, easy-to-implement capabilities for small and medium financial providers will find success. Similarly, the growing prominence of mobile in this space will spawn exciting innovations that we probably can’t even conceive of yet.

No one knows exactly what the future holds. But to stay relevant and competitive in 2019, businesses need to stay on top of changing financial services trends and conditions. The companies that will thrive over the next twelve months will be those, like PrePay Solutions, that are aware of market shifts and nimble enough to capitalize on those changes.

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