When Sean and I started Anthemis more than a decade ago, we set out to transform the financial system for a digital age. We wanted to deploy human and financial capital in a diverse and inclusive way and, in the process, create a more transparent, resilient and fair market system for all. You know, just the simple stuff.

Fast forward to this most challenging year, and our early thesis has never been more relevant. The role and promise of fintech to help people and businesses navigate the financial hurdles of 2020 have been enormous. There’s a growing industry-wide focus on issues of diversity, inclusivity and democratization. And, we are seeing a record number of deals in the sector, high-end valuations, increased M&A activity and potential IPOs.

The takeaway is that the pandemic proved to be a catalyst for some much-needed change. Collectively, the steps we take next will define a new era for the financial system and, if we do it thoughtfully, we can create a system that’s not only more resilient but also more accessible and diverse. As we wrap up an unforgettable year, here’s a look at the trends that will drive additional changes in 2021 and beyond.

The focus on diversity in founders and teams is more than a trend. Over the years, I’ve witnessed much discussion about – but very little action around – funding startups founded by women and people of color. But it feels very different this time. The industry recognizes the opportunities for generating alpha when you’ve got a diverse team looking for deals, not to mention diverse leaders creating products and building and running companies. But, too many times, excuses about how hard it is to find and back these founders result in dismal change in the numbers. At Anthemis, 26 percent of our founders and CEOs are people of color and 21 percent are women. Our team has always been at least half women, 40 percent of our team identity as BIPOC and 11 percent of our employees are LGBTQ. And, we are at the center of an ecosystem that is exclusively financial services – one of the least diverse industries in the world. So, forgive us if we have a hard time believing the excuses.

I’m thrilled to see the discussion among investors and allocators – the LPs and institutions that back the private equity market – turn to this topic in earnest as I believe that, this time, it will yield more than just talk. We need to hold one another accountable for change, which means getting real about the numbers. We should demand that the industry reports on its diversity statistics and create a standard of excellence for what is meaningful and fair. We need to bring a cross-section of viewpoints and experiences front and center in everything we do – from building our pipeline to finding new ways to engage the market. And, we need to do the work with less diverse founders, to help them build consciously and purposefully the same level of resiliency into their companies. It’s a tangible shift, which we are starting to see across the industry, and one that will benefit companies and customers alike.

Business models serving underrepresented communities and creating democratized access to capital will lead the economic recovery. The pandemic shone a spotlight on the growing inequality that’s plagued our economy for centuries. It was the workers with little or no financial safety nets who found themselves suddenly unemployed. It was small business owners, especially in communities of color, who struggled to access relief funds. But, these problems also opened the door for new startups and models to serve markets that have been ignored. For example, there are still lots of small and mid-sized companies that remain underbanked. And there are millions of consumers who are ready to get out of debt responsibly, access new products and services as they enter a new part of their life cycle and who want to – and frankly need to – prioritize their financial wellbeing. As we move toward recovery, they’re going to need new financial services and new ways of interacting with banks, insurers and more. The startups that rise to this occasion will pave the way for a new era of more inclusive financial services.

Financial services are starting to adapt to new models of work and life. The financial services industry was created to serve Fortune 1000 companies at one end and traditionally structured small businesses – those with full-time employees and a physical location – at the other. It’s a barbell shape that doesn’t offer many resources for those in the middle. Meanwhile, the way we live and build businesses is changing dramatically. Think about the explosion of gig workers and the full-time employee who also has a lucrative side-hustle. As we head into the new year, expect to see more products and services designed for non-traditional business owners. We’re also starting to see fintech designed to support financial wellness for unbanked or underbanked communities on the consumer side. Peer-to-peer banking systems will give people access to products that haven’t been available to them before.

Techfin gains traction bringing new players to the game and demanding a new look at and understanding of regulation for the digital age. While the culture and origins of fintech can feel very different from traditional financial services, fintechs still operate in the same space. They’re managing assets or taking consumer deposits and, as a result, are subject to all the related regulations as their traditional counterparts. But, the componentization of financial services – the idea that all companies have finance embedded within them – means that there is an increased number of players who will become an important part of the larger financial services ecosystem. Therefore, a number of opportunities there will emerge to serve financial customers outside of the traditional regulatory structure. This transition to “techfin” acknowledges the ability to do just that. We’re going to hear more discussion that moves away from issues of what should – and shouldn’t – be regulated and, instead, address how we can create solutions that provide the best of both worlds.

For investors, Silicon Valley matters less and less. We made an early bet on distributed teams – we’ve been distributed since Anthemis started. We’ve long thought it was important that our people understand the nuances of different geographies and believe that they could get into the global deal flow. But, those deals come from everywhere. We don’t rely on Silicon Valley exclusively to generate investment opportunities. Looking ahead, more VC firms will rethink their reliance not just on California but North America in general. Instead, they’re going to focus on accessing transactions that make sense for their mission and doing this in a way that balances their portfolio return. That said, having a deep understanding of local regulatory, institutional and cultural frameworks is still essential and having people on the ground around the world will matter. The building blocks of finance may be similar across regions, but being local will not only help you access the best deals, it will give you a bird’s eye view of how the industry is evolving.

New asset management products will emerge to capitalize on the shift toward investing for a double bottom line. In the same way diversity, equity and inclusion (DEI) has been spotlighted this year, we have also seen the focus shift toward environment, social and governance (ESG) investing. If this renewed and expanded perspective is going to stick, it will require products to emerge that prioritize and mandate virtuous cycle outcomes. The financial services industry has long been vulnerable to predatory behavior by an unscrupulous few whose efforts can create a ripple effect of negative outcomes for many. While we have witnessed the impact of this in waves and spurts throughout the last century, the stakes for change have never felt higher. While we are optimistic about the new funds and structures emerging to back companies with ESG as a priority, we are even more excited about the idea that the asset management industry itself can evolve in its economics to support this democratization even further. There are several new models emerging in which funds and products require – and are built for and by the participants – where owners, customers and employees all share the wealth, and we are hopeful that 2021 is the year these products take off.

2020 was a painful year for so many. But, the challenges have spurred people to think deeply about problems in our society in ways they haven’t before. It’s hard work, but it’s also the start of much hope. And, I think that, when we reflect back on 2021, we’ll have made that much more progress toward a financial system that’s truly built for everyone.