From 2020, we learned that with great challenge comes great opportunity; and now in 2021, we expect a rebound in fintech activity.

Here are our top predictions for fintech in H1’21.

This article is featured in Pulse of Fintech H2’20.

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Payments will stay

Investments in the payments space will be hot around the world, particularly in less mature markets. We will likely see large payments players consolidating to drive global scale, which will drive new mega M&A deals.

Embedded finance will emerge as the new North Star

There will be strong growth in embedded finance (e.g., buy now and pay later programs, embedded insurance options) and banking-as-a-service offerings and in related partnerships.

New markets for fintech will emerge

While the US should continue to dominate fintech investment globally, fintech hubs will likely continue to evolve and grow especially in Central and North Asia and South America.

The pipeline of fintech IPOs grow globally

Given the successful IPOs of a number of tech unicorns in 2020, IPOs will likely be on the agenda for a number of mature fintech unicorns in 2021. Many local exchanges are also making themselves much attractive for technology listings to compete with NASDAQ.

M&A will make a big rebound

M&A activity may see a resurgence, driven by incumbents looking to accelerate their acquisition of digital capabilities and by fintechs looking to scale as they look to grow globally or extend into nearby adjacencies.

Crypto-assets will become mainstream

The evolution of digital ledger technologies combined with stablecoins and increasing interest in central bank digital currencies will begin to open up tremendous opportunities in the cross-border payments space.