The fintech industry is one of the fastest growing sectors in the world, with the last decade bringing a significant boom in growth and innovation. Fall 2023 is set to continue the trend, with accelerating digital transformation and evolving consumer preferences thrusting the industry to greater heights. Fintech companies are poised to revolutionize the way we manage our finances, and there are several key trends that are setting the groundwork for the transformation of the fintech landscape and the financial industry.
Also read: Understanding Super-apps and Leveraging them in Fintech.
1. Buy now, pay later (BNPL)
Buy now, pay later (BNPL) is probably the fastest-growing trend in fintech. Customers are able to split payment for both online and in-store purchases into separate installments, or even delay full payment for their purchase. A number of companies such as Klarna and Clearpay have brought this technology into the mainstream, operating deals and offers with big brand names to bring consumers great deals and bigger incentives to buy into the tech.
It’s a convenient and flexible payment method that doesn’t work just for the customer but also helps businesses by making big sales more feasible and encouraging customer loyalty. The global BNPL market is set to reach $67bn by 2025 — a huge potential for growth.
2. Contactless Technology
Contactless payments are practically ubiquitous by now, with the technology receiving a huge boost during the Covid pandemic. Sectors that are yet to embrace the technology are fast falling under its spell and the massive growth is set to continue in 2023. Consumers are demanding faster and more convenient ways to pay for goods and services, and nothing is more efficient than the simple tap-and-go of contactless payments. Near-field communication (NFC) in mobile phones has accelerated its growth even faster — consumers need only tap their smartphones or smartwatches to make a secure payment.
Also read: Pros and Cons of Online-Only Bank Accounts.
3. Fintech Super Apps
Fintech super apps have one goal in mind — full integration of financial services for maximum customer convenience. By tying together services like payments, investments, loans and insurance into a single platform, users are able to access all of their monetary needs in one place. It’s a great user experience, truly tailored to the customer, especially with the mobile-first approach catering to our on-the-go, fast-paced life.
4. Digital-only Banks, or Neobanks
Digital-only banks, or neobanks, are changing the face of the banking industry. Operating without physical branches, neobanks offer customers a seamless banking experience accessed entirely via the web. The banks focus primarily on mobile apps — a big feature of all growing fintechs — allowing customers to handle all of their account management and payments from their mobile phone. Upfront costs are lower and response times better, and with their focus on innovation, neobanks invariably provide a wealth of efficient and functional features for a great user experience. Neobanks are gaining traction with customers of all generations, with the userbase expected to double by 2024.
5. Embedded Finance
Embedded finance integrates financial services into non-financial platforms and applications. Following the fintech maxim of streamlined and user-friendly technology, embedded finance gives customers complete freedom to use any financial service without disrupting their day-to-day activity. The technology covers making payments, applying for loans, managing investments and more, all within a simple e-commerce platform or mobile app. The trend enhances financial convenience and opens up brand-new business opportunities to drive customer engagement and loyalty.
6. Open Banking
Open banking is all about data sharing. With cutting-edge application programming interfaces (APIs), banks are able to share customer financial data with third-party fintech providers in order to facilitate the development of new financial products and services. Like all data-gathering tech, it’s great for providing customers with more options and a broader financial experience. Fintech companies leverage customer data to deliver tailor-made solutions, empowering customers with the choices that suit them. Open banking is even set to become beneficial on a nationwide scale, and the applications are bound to grow.
7. Blockchain Technology
Blockchain technology has been the touchstone of a generation. Secure and immutable, blockchain has fostered revolution across a number of industries. It nurtures transparency and trust in a number of industries such as logistics, healthcare and even casinos, where blockchain technology can ensure that all your favorite slot games like Mega Fortune Dreams are completely fair.
As a fintech, blockchain’s primary application is in decentralized finance. It does as the name says — removing the middle man to allow customers to access financial services without intermediaries. Financial services are streamlined, contracts automated and enforced, and costs reduced. Blockchain has immense potential to shift the financial landscape as we know it.
Also read: Trendzguruji.Me: Latest News and Insights on Cyber Security.
8. Big data
The digital era is all about data. With its unprecedented availability and value, companies are able to gather vast amounts of data to transform the way in which the entire financial sector operates. Big data analytics extract valuable insights out of mammoth datasets — and this isn’t only used for advertisements and applications like open banking, as discussed above. Companies use big data for razor-sharp risk assessments, fraud detection and customer segmentation. It’s an improvement to the safety and security of the financial landscape for customers across the globe, and it’s set to grow this year, driving further innovation within the fintech industry.
9. RegTech
Regulatory Technology might be less familiar than many of the other items on this list. Known as RegTech, it facilitates company’s compliances with regulatory requirements. This is largely a behind-the-scenes tech, but it’s one that every customer benefits from. Regulations are becoming increasingly complex, with a focus and drive for customer protection in our rapid move to an online world. RegTech is the solution to streamline the compliance process for financial institutions, using AI and machine learning to reduce costs and mitigate risks. It’s inevitable that RegTech will be one of the most crucial foundations in the ever-growing fintech industry.
10. Advanced Cybersecurity
We rely more on digital services than ever before and that has created a landscape ripe for cyberthreats. A wealth of sensitive customer and corporate data is held online and fintech companies have invested invest heavily in advanced cybersecurity measures to keep this data safe from cyberthreats. Encryption, multi-factor authentication and threat detection technologies are just the tip of the iceberg in this field. Ongoing advancements in cybersecurity are crucial in maintaining trust and safeguarding the integrity of financial transactions.
