The development in the science, technology, and innovation sector has been tremendous over the past few decades. The world is swiftly swerving into a constrained digital realm, and we are witnessing many innovations in the digital world that we thought was impossible. At this rate, everything will be digitalized within a few decades.
We can realize the astronomical growth of digital platforms compared to the previous years. Everyone wants convenience and ease with everything these days, hence the rise of the need to go digital and online.
With the rapid evolution of customers wanting online services and transactions, it has become essential to make banking and financial services online and user-friendly. Thus, the requirement of FINTECH.
As banks and financial sectors realize the need for fintech, they are heavily interested and started investing. Fintechs’ growth is significant globally, and it will only grow stronger with time.
Top FinTech Trends in 2022
Let us discuss some of the top fintech trends in 2022. Some of these trends have come to life, while some have a high probability soon.
- Traditional institutions incorporating fintech service
- The rise of cross-border eCommerce
- The rise of Digital-Only Banking or [Neo Banking]
- Use of Artificial Intelligence and Adaptive Machine Learning
- Mobile [Digital] Payments go mainstream
- Implementation of Customer-centric Service
- Focus on blockchain technology
- Payroll Fintech: grabbing the attention
- Fintech rebranding: themselves as a data organization
- ESG-focused Fintechs
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1. Traditional institutions incorporating fintech service
With the rise of innovations and technologies, traditional businesses [institutions] will need to up their game to match the market fluidity. Many such institutions have started investing and incorporating fintech.
RegTech, InsurTech, and other hybrid techs collaborate with conventional businesses to suggest a way to update their infrastructure and reduce long-term costs. Fresh fintech startups will persist in capturing the market through strategic affiliation and coalition.
2. The rise of cross-border eCommerce
A few years back, we saw a handful of eCommerce sites that operated within confined borders, and it is not the same today. The development in technologies, innovation, and ideas have made imagination a reality, and eCommerce sites conduct business worldwide regardless of their geolocation.
A study published by Accenture states that total global cross-border payment flow is growing by around 5% (CAGR) a year and tip to top 156 trillion US dollars by 2022.
International transactions offer a huge economic boost for small businesses. They attain the capability to conduct business globally.
3. The rise of Digital-Only Banking or [Neo Banking]
We have been used to digital payments for a few years now, but the concept of digital banks or neo banks is emerging gradually. Cloud banking and free-floating financial platforms are changing the idea of banking and how people bank.
One day the banks will fully run on the internet without the need of establishing physical branches. This concept will prove convenient and accessible to customers globally within their devices.
It will benefit the banks as well as they do not need physical branches and other infrastructures. It can be the best alternative to traditional banks that focuses on customer service. With the help of AIs, biometrics, cyber security, and online banking, customers will benefit from a wide range of financial assistance in their personal spaces.
4. Use of Artificial Intelligence and Adaptive Machine Learning
The use of AIs and Adaptive ML in the banking sector has massively boosted the capability and efficiency of banks. Banks and financial institutions use AIs and ML to collect and process large chunks of data to devise real-time patterns to make quick decisions.
They are constantly improving the effectiveness and efficiency of the institutions. AIs help employees in various ways to increase productivity, and banks decrease costs drastically.
Fintechs have invested in research to use AIs and ML to assist financial institutions in detecting fraud, improving customer experience, and making effective loan decisions.
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5. Mobile [Digital] Payments go mainstream
Customers have become the supreme with mobile banking and payments. This fintech movement includes various payment options like ACH, virtual currency, and blockchain, and these alternatives change how customers view digital payments and fund transfers.
Everyone today embraces smartphone payments for the smallest of business transactions. The rate of mobile payments and fund transfers via digital methods has significantly grown within a few years. Customers do not need to worry about how mobile technologies will handle the increasing transactions.
The modern technologies and innovations ensure that the networks will handle the maximum of transactions to provide a reliable experience.
Financial institutions will have to digitalize their payment systems completely to facilitate the growing number of customers shifting towards mobile payments within a few years.
6. Implementation of Customer-centric Service
The new generation of customers has become used to getting things done with a click of buttons. Ordering food using apps, paying for the delivery, working from home, etc., are prime examples of the present generation.
Financial institutions and banks should aim to provide customer-centric services [solutions] to meet the needs of their consumers. Nobody wants to stand in lines in the banks to withdraw and deposit cheques today.
Institutions should digitalize all of their functions and let the customers perform their part from wherever they are. Fintech comes into the equation to ultimately help institutions automate financial processes and get rid of manual processes.
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7. Focus on blockchain technology
Let us discuss two important features of blockchain first.
Digital Identity Management [DIM] in blockchain delivers invincible security for both ends of the transaction funnel. Blockchain is being used increasingly to manage regulatory and audit issues and prevent fraud, and blockchain is infamous for its protection.
Blockchain is superfast. It not only accelerates payments, asset transfers, and investments but also eliminates blunders that provoke delays.
Given the features, no wonder that financial institutions are adapting to the blockchain trend. Most fresh startups are blockchain-based and incorporate crypto technologies across multiple enterprise sectors.
The banking and financial sectors are implementing the blockchain to improve workflow dynamics. Aces say blockchain will influence the packaging sector with the loftiest intensity from 2022 onwards. We can only predict that blockchain is for the future.
8. Payroll Fintech: grabbing the attention
Fintech has solely focused on the payments from a customer to merchants or peer-to-peer in the previous years. It is about to change in the coming years as we can expect to see payroll options like crypto payroll, salary on demand, salary advances, and early direct deposit.
We never know if these prospects will flourish in the market or fade away with time, but we won’t be very surprised if they take over the globe. Things we imagine now will be the reality of tomorrow. With the advancement of technologies and innovations, these prospects should come to life within a few years.
9. Fintech rebranding: themselves as a data organization
We can only imagine that many fintech will rebrand themselves as data organizations. They turn themselves into data providers who happen to supply economic and payment services. The sole reason behind the rebranding will be to look different and authentic in the eyes of investors and the market [general people].
Rebranding can help them grow and explore new possibilities as data manipulation can create numerous routes.
Investors with different ideas will join the cause to utilize the available data, comprehend a suitable use, and develop intelligence [product] focusing on the scenarios and problems.
The intelligence will help the growth of the institutions within a certain niche and the other sectors. Fintech will build itself as a completely different organization with a new vision and prospects focused on solving global problems. Data organizations have a bright future in the coming years.
10. ESG-focused Fintechs
Fintech should consider all financial and non-financial aspects while building a brand. In traditional times investors almost neglected the non-financial part of an organization, and the focus was on the financial side of earning as much as possible and becoming rich.
In the present scenario, investors consider ESG [Environmental, Social, and Governance] as a part of their investigation to pinpoint material stake and evolution opportunities. Aces [experts] predict that fintech with ESG-focus will attract more investors in the coming years.
Fintech should consider the present global situation and contribute in some way or the other to gain public attention and appreciation. It will directly or indirectly assist in the organization’s growth as it attracts big names in the market for collaboration or investment.
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The growth of fintech is only going to go upwards from now on. Fintech is the solution to all the problems within the financial organizations and banking sectors.
Financial sectors are constantly evolving, and they are one of the important industries of society. Digitalization of the economic sectors like banks will be crucial to face treacherous situations and pandemics like COVID, as the services should not be interrupted even in those situations.
The financial sectors and fintech complement each other to grow bigger with time. Fintech will prove to be of tremendous value to the world in the upcoming days.