Fintech is an industry that, given global crises in 2020, is expected to pivot majorly in 2021. Because of this, we may expect to see some ventures making significant funding strides. Does Pennylane, an early 2021 success, set the template for Fintech startups for the year ahead?
Understanding Fintech Startups' Challenges for 2021
Before we look at Pennylane's leading example, we need to consider what the world is likely to expect from Fintech in 2021. 2020 was a year where many people drifted towards digital finance in the face of unprecedented circumstances.
Therefore, it is safe to assume, as FinExtra explores, startups with a productive attitude will have good results in the year ahead. Unprecedented global financial woes forced banks and lenders to take one of two routes. They either waited to see what happened next or immediately pivoted to fit.
2021 will be a big year for pivoting in Fintech. FinExtra further explores that such changes in the industry will revolve around broader cryptocurrency adoption. The expected shifting may occur as a result of Bitcoin's boom towards the end of 2020.
What's more, experts suggest that Fintech companies should continue breaking down barriers in 2021. There may be more of a pivot towards 'open banking.' It could mean the removal of bureaucracy, to some extent, to make everyday finance simpler for all.
Looking at Pennylane
To consider how Fintech ventures may pivot further during 2021, Pennylane offers a great example. The French accounting venture recently confirmed funding of $18.4 million through direct investment. Backed by Partech and Global Founders Capital, the firm has its eyes on making accounting more straightforward for everyday people.
Pennylane's model is an excellent example of how Fintech may hope to adapt further post-2020. TechCrunch advises that the brand's system breaks down accountancy discussion into a straightforward stream. Pennylane's board confirms this is an effort to make number crunching easier for accountants and their customers alike.
Pennylane argues that accounting wastes time, energy, and resources undertaking menial tasks. Through its simple, direct interface, users can communicate directly with their money managers. It is a straightforward removal of bureaucracy, which, as mentioned above, is likely to be a significant pivot demand for 2021.
Could other Fintech startups learn from Pennylane? If 2020 served us anything, it is the fact that many of the systems we are using are inadequate for adapting to crises. The world of finance is still shaking as 2020's fallout continues to rumble. However, a year on, venture bosses are in a great position to make long-lasting, future-proof changes.
Can Fintech Evolve Much More?
Yes, there is an argument that complete fluidity may be possible by completely removing banks from the picture. Indeed, this is the argument for cryptocurrency, and with BTC riding high, it is clear there is a thirsty market.
Investors may wish to make 2021 the year they show interest in pivoting Fintech startups. Many firms and brands are already easy to find, for example, through startup databases such as Fundz.