The banking and fintech trends you need to know for 2021

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Good day readers,

Pleased New 12 months!

In case you missed it, check out our rundown of the Wall Street stories that defined 2020. There’s lots to compensate for, however listed below are just some of my private favorites:

And now that we’re formally on Day 2 of 2021, it is a good time to take inventory of what to anticipate within the 12 months forward for the whole lot from M&A activity and the way forward for the IPO roadshow to financial-advisor moves and the next hot fintech trends. You’ll be able to learn a few of our greatest predictions under.

If there’s one takeaway, it is that there might be loads of information, offers, and drama to maintain tabs on. For those who’re not but a e-newsletter subscriber, you can sign up here to get your each day dose of the tales dominating banking and enterprise.

We even have a must-see stay occasion developing on Jan. 5 — Sign up here for our webinar on how to make the most out of PPP.

M&A trends to watch, from a SPAC buying frenzy to a jump in cross-border deals

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From Reed Alexander:

M&A exercise got here surging back within the latter half of 2020. Now, Wall Road is primed for sturdy dealmaking in 2021.

A brand new regime in Washington might alleviate the apprehensions of some abroad consumers and spark renewed cross-border dealmaking exercise, mentioned Vito Sperduto, co-head of worldwide M&A at RBC Capital Markets.

Cross-border transactions are more likely to see a “important uptick” as soon as the administration of President-elect Joe Biden steps in, Sperduto mentioned. Whereas some worldwide offers have occurred prior to now 4 years, “there already was a slowdown in cross-border transactions pre-pandemic,” he mentioned, “and it is simply gotten worse.”

Read our full list of 12 M&A predictions here.

Hedge funds to watch: Big names, new launches, and under-the-radar managers

From Bradley Saacks:

Hedge funds, on common, had an excellent 12 months — the latest Preqin knowledge exhibits hedge funds are up greater than 13% for the 12 months after a powerful November.

However efficiency wasn’t equal throughout all technique varieties, with concentrated fairness managers — particularly these with big private-market bets— main the best way whereas well-known quants struggled. And a whole lot of these tendencies are anticipated to hold over by means of the brand new 12 months.

Here are the 12 hedge funds to have on your radar in 2021.

Embedded finance, finfluencers, and a ‘great rebundling’

Charli Damelio and Dixie Damelio speak during Graduate Together

From Shannen Balogh:

Insider requested 4 fintech traders what they’re searching for in 2021. All talked about embedded finance as a serious development that is more likely to proceed as fintechs, and people in different industries, look to broaden the kinds of providers they provide prospects.

“I feel we’re in an awesome rebundling,” Ashley Paston, an investor at Bain Capital Ventures, instructed Insider. “For those who look in any fintech, they’ve expanded exterior of their preliminary product to create extra worth for his or her finish buyer.”

Traders additionally see an increase of ‘finfluencers’ to assist attain youthful prospects, particularly after Step, a digital financial institution for teenagers, launched in partnership with TikTok star Charli D’Amelio. Since its rollout in October, the fintech has over 500,000 sign-ups and raised a $50 million Series B.

Read our full rundown of the next hot fintech trends here.

What’s next for consumer banking

FILE PHOTO: A woman passes by a Chase bank in Times Square in New York City, U.S., March 7, 2019. REUTERS/Brendan McDermid

From Carter Johnson:

The previous 12 months accelerated tendencies like cell banking and digitization which have lengthy been constructing in shopper banking. Each have been a part of a broader shift away from in-person department visits as prospects shunned human contact in the course of the pandemic.

It is no shock, then, that as 2020 turns into 2021, predictions for what banks will prioritize revolve round additional creating technological capabilities and on-line buyer expertise.

Digitization and cloud know-how, in addition to the broader shopper credit score atmosphere and cost-cutting measures, have been high of thoughts when financial institution execs mentioned their targets for the 12 months forward.

Here’s what’s in store for 5 big banks in 2021, from leadership changes to ambitious tech pushes.

Fintech investors are excited for another big year after 2020 blew away their expectations

Jay Ganatra, director of PayPal Ventures

From Shannen Balogh:

Many fintechs noticed large development and adoption in 2020. There’s additionally been no scarcity of funding. Personal funding has surged with a document variety of mega-rounds — $100 million and above — this 12 months, according to a recent CBInsights report. And fintechs like Affirm and Marqeta are gearing up for IPOs.

Traders do not see issues cooling down any time quickly.

“We’re very excited for a few of our extra mature firms for the exit atmosphere that they will be seeing,” mentioned Jay Ganatra, associate at PayPal Ventures, whose portfolio companies embrace private finance app Acorns and earned wage access startup Even.

Here’s why fintech investors are so optimistic about opportunities in 2021, from M&A and public listings to competitive private funding rounds.

Tech will continue transforming the legal industry at lightning speed

From Yoonji Han:

2020 was an enormous 12 months for authorized tech. As legislation corporations and companies throughout industries shifted to distant work, authorized tech firms stepped in to supply digital options to assist streamline the transition, from shopper relationship administration to contract evaluation.

Shrinking budgets and increasing client demands for effectivity additional spurred attorneys’ adoption of know-how.

“It is an thrilling time for the authorized career,” mentioned Jack Rives, government director of the American Bar Affiliation. “Attorneys are embracing and rising extra snug with know-how.”

Insider spoke with six authorized tech consultants on the largest transformations of 2020, and their predictions for the 12 months forward.

Here are the 5 big trends to watch.

Top headhunters expect another busy year for financial-advisor moves

From Rebecca Ungarino:

Not because the final monetary disaster has Jeff Feldman, a Chicago-based recruiter and advisor for monetary advisors, seen such a frenetic 12 months of exercise.

2020 has been his second-busiest on document by quantity, bested solely by 2009. And he would not see that slowing down. Right now, Feldman’s roster of shoppers consists of wealth managers First Republic, LPL Monetary, RBC Capital Administration, and Rockefeller Capital Management.

“I feel you are going to see a whole lot of motion within the first half” of subsequent 12 months, Feldman mentioned. “Due to the previous six months, advisors have taken this time to teach themselves on new enterprise fashions — and the competitors.”

You can read more about what’s stoking the frenzy here.

Goldman Sachs tech bankers predict the IPO roadshow will never be the same

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From Reed Alexander:

One massive change from 2020 that is possible right here to remain is the effectivity that has been launched within the IPO roadshow course of, in accordance with Jane Dunlevie, co-head of Goldman Sachs’ international web funding banking.

Historically, bankers hit the street main as much as an IPO to courtroom traders and generate buzz. However the pandemic compelled bankers to seek out creative virtual solutions for partaking traders with out assembly them face-to-face.

“It has been extremely productive,” Dunlevie mentioned. “We’re getting roadshows finished in fewer days, for essentially the most half, so we are able to reduce off one or two and even three days of conferences, and these IPOs are getting finished I feel extremely efficiently.”

Features of that can possible proceed.

“Our expectation is to attempt to take the very best of each worlds, if and because the world reopens,” she mentioned. That may imply administration groups hit up one or two massive cities, however “we are able to most likely take many of those efficiencies into processes going ahead.”