Global Processing Services (GPS): 2021 Global Predictions
Despite the overwhelming challenges of a global pandemic, 2020 saw an enormous amount of resilience, ingenuity and innovation in the world of fintech, payments and financial services. As we reach the final days of this most eventful of years, we’re setting our sights on 2021 and sharing our predictions of what to expect from the next 12 months.
1) The Effects of COVID-19 Will Continue to Influence Consumer Behaviour
It is now well established that COVID-19 has accelerated many pre-pandemic trends. For example, while the number of cashless payments was already rising globally (), lockdown restrictions to combat the coronavirus have supercharged the trend. Who could have imagined that the World Health Organisation would advise against using cash for health reasons?
The impact on the digitisation of financial services has been dramatic. In the UK, six million adults (or 12% of the population) during the initial lockdown, , and in July 2020 there were (20.8% more than in June 2020).
In the APAC region, which was already the global leader in non-cash transactions () due to high adoption of mobile payments and digital wallets, a Mastercard survey found that as a result of COVID-19.
However long the pandemic lasts, these trends in consumer behaviours will persist throughout 2021. Cashless payments will continue to outpace cash, digital-only banking will see more widespread adoption, and digital wallet usage will expand. Financial services providers that can quickly and effectively react to these changes will thrive.
2) Securing Fintech Investment Could Become More Challenging
Whilst investors pumped , an increase of 22% over the second half of 2019, more than half of that amount was invested in just five companies - Revolut, Checkout.com, Starling Bank, Onfido and Thought Machine – with early-stage fintechs raising just 8% of total investments.
Has the ongoing economic uncertainty surrounding COVID-19 pushed investors towards ‘safer’ bets on more mature, later-stage fintechs? It’s hard to say for certain, but we predict that startups may find capital harder to access in 2021 as investors focus on “category winners” and become more conservative and risk averse.
Fintechs seeking investment in the next 12 months will thus need to have a differentiated proposition, a clear path to profitability, strong leadership, and partnerships with credible, experienced suppliers. For businesses seeking to understand what investors are looking for in the next fintech, our Chief Product Officer, Shaun Puckrin, .
3) The Embedded Finance Gold Rush Will Begin in Earnest
Aside from COVID-19, “embedded finance” has been the industry topic of 2020. It encapsulates the idea that financial products in and of themselves are less important than the context in which a customer needs them. While the traditional core banking model has offered diminishing returns, brands like Amazon, Apple, Uber and others have seen success by embedding payments, loans and insurance directly into their offerings. It’s not hard to see the value of, for example, a car rental company offering car insurance during the hire process, or a house hunting app offering mortgages.
, the embedded finance opportunity will be worth $3.6 trillion by 2030. This will be supported by the Banking-as-a-Service (BaaS) ecosystem, which offers the full banking stack to any business, regardless of industry, seeking to improve customer experiences with capabilities it would have been unable to build alone. The BaaS model has now reached a level of maturity that will likely see a proliferation of brands capitalising on it in 2021. The floodgates have therefore been opened and as the number of businesses embedding finance into their offerings increases exponentially, so will the number of traditional banks offering their services to companies via the BaaS model.
4) The Fintech Industry Will Need to Get Serious About Financial Inclusion
The coronavirus pandemic has thrown the inequalities of our society into sharp relief. It is a crisis that, , disproportionately affects the poor and vulnerable, illustrating how the inability of some groups to access financial services requires a meaningful solution.
In 2020, we’ve seen some ingenious, innovative solutions addressing financial inclusion: allows people to make purchases on someone else’s behalf (for example, self-isolating vulnerable relatives); enables governments and charities to distribute money quickly and safely while maintaining budgetary controls; and has provided specially designed prepaid cards to individuals without the ability to access a typical bank account.
And these innovations aren’t just limited to Europe. In Brazil’s Marica neighbourhood, has provided support to people out of work as a result of the coronavirus. In the Asia Pacific region, there has been greater acceleration towards financial inclusion with the imminent issuing of digital banking licences in Singapore and Malaysia, through which we are seeing the emergence of exciting propositions like the Razer Card by , which is targeting the banking needs of the underserved millennial and Generation Z segments through its Razer Youth Bank arm.
In 2021, we will likely feel the full of effects of a coronavirus-driven recession. It will fall to fintechs and the broader financial services ecosystem to build on the shining examples of financial inclusion in 2020 and ensure the least fortunate in our society do not get left behind.
More than anything, 2020 has shown how our industry can respond to massive upheaval with agility and innovative thinking. As we enter 2021, these qualities will be more important than ever as we seek to deliver hyper-personalised and inclusive experiences and products that customers demand in these constantly changing times.
Seo JungJin: Who is EY’s World Entrepreneur of 2021?
Seo JungJin, founder of biopharma firm Celltrion, which most recently developed an antibody treatment for COVID-19, has been named the EY World Entrepreneur of the Year 2021, becoming the first South Korean in the award’s 21-year history.
Regarded as one of the world’s most prestigious business awards program for entrepreneurs, the EY Entrepreneur of the Year celebrates visionary and innovative leaders from across 60 countries who are transforming the world and fostering growth.
JungJin, who is now honoroary chairman of Celltrion Group, was up against a worthy cast of entrepreneurial competitors, taking the crown from among 45 award winners across 38 countries and territories.
Speaking during the virtual event, JungJin described his own interpretation of entrepreneurship as something that brings together “a group of people toward a common vision, embracing challenges as opportunities and committing oneself to contribute to the greater good”.
Why was JungJin crowned King Entrepreneur?
A South Korean native and now 63 years of age, JungJin founded biopharmaceutical firm Celltrion in 2003. In the nearly two decades since its founding, Celltrion has lived up to its goal of advancing health and welfare for all by developing ground-breaking drugs to treat autoimmune disease, various forms of cancer and, most recently, COVID-19.
The company, which JungJin started with just US$45,000 and five of his colleagues, has since growth to more than 2,1000 employees with sales permits in more than 90 countries and revenues exceeding US$1.69bn.
According to the panel, JungJin’s story is a shining example of the power of an unstoppable entrepreneur to change the world with the pandel moved by both his incredible story and his purpose-driven leadership, innovative mindset and entrepreneurial spirit.
Described by the chair of the EY judging panel Rosaleen Blair as “representing everything an unstoppable should be” from taking on the world’s biggest health care challenges to consistently creating long-term value for his company, JungJin’s story is one of incredible tenacity and perseverance that the judging panel felt most represented the entrepreneurial spirit.
“He’s taken breathtaking risks, both personal and professional, to found Celltrion and grow it into one of the world’s leading biopharmaceutical companies,” says Stasia Mitchell, EY Global Entrepreneurship Leader. “His passion for creating affordable, life-saving health care and flair for tackling global problems has led to many treatments that have helped millions of people worldwide and was especially evident this past year through the creation of a COVID-19 antibody treatment.”
How did JungJin get there?
JungJin's entrepreneurial journey started at an early age when he worked as a taxi driver to get himself through Konkuk University in Seoul, South Korea. After studying industrial engineering, he rose through the ranks of Daewoo Motor Co. before losing his job amid the carmaker’s financial troubles following the 1997 Asian economic crisis.
Following this, JungJin started collaborating with colleagues to explore business opportunities in different industries, though none delivered lasting success. The turning point came after he attended a talk hosted by renowned scholars, which inspired him to focus on the biopharmaceutical sector.
And so he founded Celltrion with just US$45,000 of his savings. The launch of Remsima, credited with being the world's first antibody biosimilar, quickly moved Celltrion up the ranks of the country's fairly underdeveloped pharmaceutical sector. Celltrion followed this success with the launch of drugs for breast cancer and lymphoma that today are being used worldwide.
With ambitions to be the world’s first in different areas, Celltrion has pioneered numerous uncharted areas to great success over the past two decades, most recently responding to the global pandemic by successfully developing an antibody treatment for COVID-19 and working to ensure a timely supply of the safe and effective treatment.
“When I first started, my vision was to help patients gain access to safe, effective and affordable medicines and thereby enhance the quality of people’s lives,” explains JungJin. “The success of Celltrion has enabled me to expand on this while finding new ways to fuel my entrepreneurial drive.”