2021 was another year defined by the pandemic. If 2020 was about reacting to the new changes, this year was about forming a new normal. Brick and mortar financial institutions continued to improve on their digital channels. To get there, more partnerships were formed between FIs and fintech firms. Digital finance companies like Stripe and Square launched new products, expanded to new countries, and just grew overall. With numerous rounds over $100 million, global investment in fintech more than doubled 2020's levels. And who could overlook the first big steps in the mainstreaming of digital assets, cryptocurrencies, and blockchain.
It's through this lens that we look back at our biggest stories of the year.
WTF is an NFT?: One of the biggest stories this year is on the emergence of the non-fungible token. In their basic forms, NFTs are the digital equivalent of trading cards and artwork. What started out as a novelty became big business -- some NFTs were sold for tens of millions of dollars this year.
What goes up never goes up in a straight line -- I learned that from my days as a trader. After splashy headlines of large sales of NFTs came the inevitable mini-crash as the hype outpaced the reality, leading to stories like Are NFTs dead? Making sense of the recent market crash. The crash was short-lived as innovators continue to develop new use cases for NFTs.
For many, buying an NFT will be their first foray into crypto. Beyond CryptoKitties and bragging rights: A look at the financial use cases of NFTs explored some of the new ideas percolating around the industry. Beyond collectibles, firms are minting financial products like mortgages into NFTs.
Nathan McCauley, co-founder and CEO of Anchorage Digital, told us that most large incumbent banks are actively building a strategy around crypto. In ‘Before they were afraid to be first, now they’re afraid to be left behind’, Paxos’ Charles Cascarilla, the founder and CEO of Paxos shared his perspective on the journey of FIs into crypto and how they're determining to move into the space. Gemini users can now buy cryptocurrencies with Apple Pay and Google Pay looked deeper at the types of products and integrations making it easier to buy and sell crypto.
Technology and protocols matter. Certain blockchains are better built for specific products, like NFTs. In Is the move to Ethereum 2.0 a watershed moment for crypto?, we explored the changes happening to one of the most popular blockchains. Ethereum 2.0 involves a set of upgrades that will move Ethereum from a Proof-of-Work to a Proof-of-Stake consensus mechanism. The transition is being touted as a game-changer not just for Ethereum, but for blockchain itself.
The financial industry still has a long way to go to be a leader in diversity. While it's more popular to use an ESG filter to invest in companies, investment firms don't necessarily walk the walk themselves.
We explored diversity and culture this year, like more fair and inclusive hiring practices in “You want the right people to come in and say, ‘I think I can do this job’”: What banks are doing to hire more neurodiverse employees.
And as most firms are finding a talent shortage during this period of The Great Resignation, some traditional firms like Bank of America have focused more on investing in their existing employees' skills and talents. ‘Tenure is one of the biggest predictors of overall success’: Inside Bank of America’s workforce reskilling strategy looked at Bank of America’s reskilling efforts and how they play an important role in its employee development and retention strategy. A key area of focus for the bank is retaining its existing employees by offering internal promotions and reskilling opportunities.
Things are getting better -- even if there's still work to be done when it comes to gender equality in fintech.
This push is also making an impact in the types of products and services the industry offers. HSBC UK uses new card designs in bid for greater accessibility -- in association with the The Alzheimer’s Society UK, HSBC has redesigned its cards to make them more accessible.
As banking and payments expand beyond the four walls of the bank, they're making their way into industries far away from finance. Embedded finance was a big theme for Tearsheet this year.
- Behind the Marqeta partnership with Deserve’s Kalpesh Kapadia
- How Shopify is creating an ‘embedded finance ecosystem’ with Shopify Capital
- Fintech 2.0: Why embedded finance has brought a seismic shift in banking, and how FIs can respond
- ‘The LuluLemon of credit cards’: Paceline launches a credit card that pays users for exercising
- Is Stripe Treasury ‘game over’ for banking as a service?
Goldman Sachs' Marcus
Goldman Sachs still stands out as the most distinct example of an incumbent financial institution remaking itself for the modern era. Its retail and mainstreet brand, Marcus, launched new products and geographies this year using DTC and partnership distribution models.
- How Marcus by Goldman Sachs’ pairs direct products with strong partnerships
- Marcus by Goldman Sachs’ “You Can Money” campaign positions the bank as Main Street’s primary account
Other stories that made up Tearsheet's top viewed articles this year
- How B2B fintech lenders can reduce loan default risk and boost revenue with external data
- ‘A real underdog mentality permeates this place’: Chase’s chief product officer, Allison Beer
- ‘I can’t tell you how many millennials tell me they pay their bills at the biller’s site’: Payveris’ Marcell King
- Key considerations when evaluating a data aggregation platform
- The $61 billion cannabis industry is getting its first dedicated digital payments platform
- Green Dot launches Go2bank, its in-house challenger bank
- How the pandemic has accelerated the demise of credit cards, in 4 charts