August 10, 2022

Four fintech trends worth keeping an eye on in 2022 and beyond

fintech

2022 may be a crucial year for fintech.

Despite the enormous problems posed by the epidemic, investor confidence continues to grow as the value of global Fintech markets is predicted to grow between $127 million in the year 2018 up to $309.98 billion before 2022, which is a staggering 25% increase over the previous year.

Banks that are challenging incumbent banks are growing. They are also gaining popularity. Bank of London made history in the past by achieving the $1.1 billion valuation at its launch and becoming the 2nd UK clear bank open within the last 250 years.

What’s next in the near future? Here are the most important trends I think will influence future fintech trends in the 2022-23 timeframe and further.

The financial context will soon become essential to the mission

2022 is the year when the concept of embedded financial services (the integrated integration of financial services in non-financial spaces) becomes commonplace.

The modern consumer doesn’t need a seamless, contextual digital experience, they expect it. Financial services are no exception. Customers want to control their finances, pay their bills, and get credit whenever and when they want to without a lot of stress, even using financial solutions like Prillionaires wealth management software.

Smart companies have realized that, by integrating financial products in their customer experience, they are able to further increase their brand’s value and build an extremely loyal, happy customer base. It’s a win-win for everyone.

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When the integrated finance system develops and a variety of new technologies are introduced to the marketplace, it’ll be more simple than ever before for brands to integrate financial services into their products.

In the next year, we’re likely to witness a surge of SMEs and tech startups, as well as traditional brick-and-mortar businesses looking to improve their customer experience by offering contextual financial services.

One-click is the preferred checkout option

Amazon first introduced one-click checkouts over 10 years back. Since the time, we’ve seen numerous new and disruptive players join the marketplace, including Checkout.com and Bolt which use it to transform the experience of buying from a consumer.

As commerce shifts to mobile, real-time connectivity for consumers will become commonplace and payment via digital methods will surpass the physical cards. As time passes, I believe it will be the end of manual checkout processes to make way for single-click convenience.

In 2022, I believe we’ll see one-click payment becoming the predominant method of payment within the realm of e-commerce and new players hoping to expand their offerings and also offer more integrated options, such as one-click insurance, BNPL, and more.

Web3 will be more secure as well as more easily accessible.

There’s a lot of buzz over Web3 and there’s an excellent reason. Nowadays, the majority of websites and apps online are controlled and operated by a small group of companies we’ve been able to call “Big Tech.”

Web3 aspires to decentralize the internet by re-building it on user-driven, distributed ledger technologies (i.e. blockchain). Although this is a great way to open up the internet and the internet, decentralized financial (DeFi) Web3’s principal exchange mechanism for financial transactions – leaves many things to be desired in terms of protection for consumers.

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DeFi is built entirely on blockchain technology and does not depend upon any intermediaries in the financial sector (brokerages exchanges, banks, etc.) for the exchange of funds. This allows direct peer-to-peer transactions; however, the absence of oversight and accountability can create enormous risk.

The technical barriers for brand-new Web3 users are still high and this means that new users often struggle to interact with this technology in a secure and positive manner, often with disastrous results.

If things happen to go wrong, there’s very little recourse given its nature technology and the absence of consumer protections on the entire platform. If a person is the victim of exploitation, fraud or other financial crime within the world of DeFi the algorithms that run the technology have no right to pursue recourse.

As 2022 unfolds, I am expecting to see teams within the Web3 space start to develop answers to three problems of usability, accessibility and protection of consumers. These areas of focus can help fulfill Web3’s promise to create a secure environment for financial transactions and provide the public with the confidence needed to embrace it in a mass size.

Newcomers will have to meet more stringent standards of compliance and financial criminal

The fintech industry saw dramatic growth in 2021, with 43 fintech unicorns being created during the 3rd quarter alone, nearly double the number that was recorded for the same time last year. However, this enthusiasm in the field has created a new enthusiasm for the need for innovation at any cost.

Neobanks and Challenger banks have discovered the perfect spot to provide the unique, mobile-first experience that customers are used to from every transaction. But, as they try to meet the constantly changing demands of customers Fintechs have also been in trouble with regulators.

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As customers and regulators start to call for more accountability, 2022 is likely to bring compliance to the forefront.

Compliance is more than an option to tick as a pillar of mission for any financial company or fintech that wants to introduce a new product to the market. Customers want an easy and fast experience. The challenge is to ensure that they get it without compromising the checks and controls for financial crime.

A look into the future

2021 witnessed a dramatic increase in fintech innovations and investment and the trends we discuss here are only the beginning of the iceberg.

As the fintech sector develops it will continue to play an important part to shape the direction of future financial service and providing that seamless, contextualized experience customers demand.

The rise of platforms such as Web3 and cryptocurrency, as well as instant checkout, and companies that are embracing embedded finance on a massive scale is just one of the reasons 2022 will be an important year for fintech and one that is exciting for sure!