End-of-year reflections and outlook for the new year: How 2020 changed fintech

2020: When five years of digitisation took place in one

On 1 January 2020, as we welcomed a new year, little did we know how the world would be transformed over the coming months. The Covid-19 pandemic upended life as we knew it, crippled global economies and changed how we all interact. For those of us in the UK, a new strain means the turn of the year has seen a further deterioration and another national lockdown. While economic uncertainty and health risks continue to hang in the air, most people are proving to be very resilient.

Since March, as disruption took hold with no end in sight, people rapidly adapted their habits, behaviours and ways of life. For many, it wasn’t until people were faced with the risk of going to the supermarkets that they realised how easy it would be to have groceries delivered to them, or until offices were told to close that people realised that working remotely could be done effectively. As a result, the acknowledgement of our new reality and willingness to manage everyday matters using digital resources, equated to pushing the fast-forward button: five years of digital adoption happened in less than one!

For fintech, last year was a pivotal period as demand for digital interaction soared. This did, however, expose the limitations of established players’ legacy systems and shone a bright light on those new firms that could provide better, faster service through innovative systems.

For Monument, 2020 was a landmark year. While we never planned to launch a bank in the middle of a pandemic, it turned out that the timing was highly relevant for our digital-first bank. In October, we secured our banking licence, which was a key step in our plans to launch the first challenger bank in the UK to meet the unmet demands of over 4 million ‘mass-affluent’ clients, comprised largely of professionals, property investors and entrepreneurs.

Furthermore, our team designed and undertook the building of a cloud-based, SaaS enabled architecture which is designed to remain nimble and capable of avoiding the ‘legacy’ tag many systems attain as soon as they are functional. The ability to achieve all of this, largely through highly collaborative, remote working, is a genuine testament to the quality of our exceptional team.

Face to face interactions, enabling people to talk about their business proposition, convey their passion for it, and answer questions naturally sit at the heart of traditional fundraising activity. Monument had to raise capital in the middle of the pandemic of 2020; so, face to face meetings, their personal, human touch, were out of the question. Monument had to undertake each and every fundraising discussion through digital video meetings, many with individuals the firm was meeting for the first time. More about how this Series A fundraising round turned out, later; for now, suffice it to say that it was both a challenging and successful experience…

2021: the year of great opportunities and further challenges for fintech

We have all been looking into the crystal ball to see what this year holds for fintech and as ever industry pundits have made many predictions (many of them predictable). But, common sense and recent experience indicates two realities: first, there is an ever increasing opportunity to establish new businesses that deliver digital solutions in new segments and markets, but second, fintechs that want to secure funding will need to demonstrate the robustness of business models to deliver real, scalable profitability. In the financial world, unlike social media and other ad revenue businesses, eye-balls are not enough. Customers, not users, will need to be the new mantra.

In 2021, an even brighter spotlight will shine on organisations’ cultures. Their ability to retain the best people, to demonstrate that the firm serves genuine needs and delivers a positive contribution to society, will be differentiating factors. Businesses that truly support their clients, employees and wider society through the pandemic, and onward through the years, will receive both recognition and reward. No industry, including Fintech, exists in a vacuum. A sincere commitment to corporate social responsibility, and personal social responsibility, are going to be the tenets that build trust and loyalty and form a part of the ultimate reward. We are all members of the society that we seek to serve and this is fundamental to the mutually beneficial relationships we sometimes summarily refer to as civilization.

James Baldwin once wrote “Not everything that is faced can be changed; but nothing can be changed until it is faced.”

Let us face our challenges together and continue on the journey of building a better society together.

Conclusion

There will be significant challenges for our world this year, but as Albert Einstein said: “in the midst of every crisis lies great opportunity”. There is no doubt, that fintech will have the opportunity to demonstrate its worth to its clients and society over the coming year.

We anticipate that it will be a challenging, significant year for Monument as we continue building our bank, expanding our capabilities, and serving our clients. We won’t be operating in a vacuum and anticipate that the macro-economic headwinds won’t dissipate as quickly as we would like.

But, we are confident that fintech firms, including Monument, can play an exceptional role in supporting the “building back better” of our economy. This idea is shared by John Glen, Economic Secretary to the Treasury, who said in a national newspaper: “The dynamism and fresh ideas (of fintechs) will now play an equally important role in driving forward the UK’s recovery.” Fintechs are likely to be a key enabler and driving force for society’s digital future and renewed prosperity. My hope is that we can all remain nimble and resilient and that we will have the ability to collaborate (albeit digitally) to make the most of what is possible by continuing to bring out the best in each of us.

By Mintoo Bhandari, CEO and co-founder, Monument