The Fintech space has been growing consistently across the board for the past few years while these trends for 2023 are likely to continue as much uncharted water is still left to explore.
As competition increases, fintechs need to find their own space in the digital world, meaning differentiation through unique, user-centric value propositions.
With changes in the financial landscape coming in at an incredibly fast pace, both new banking and the payments field will most likely be met with new concepts in the near future.
As fintechs transcend the role of being only a financial institution, financial inclusion will continue to be a hot topic for 2023.
Here are the trends you might have missed.
5 Fintech Trends for 2023
Digital-Only Banks: Can Clicks without Bricks Work?
Digital-only banking is making waves as new virtual banking services sprout.
Whether it’s no-fees contactless payments, peer-to-peer transfers, or diversification options such as crypto, the fact is that many of these services have made an impact in the banking industry.
As the rate of physical visits to the banks seems to be going down, one can see that on the other side of the spectrum digital-only banks are blooming.
Digital-only banking has speed and cost-efficient processes at its heart, but it comes with an incredible upside on at least two levels: Big data analysis and Tribe-based Banking.
Tribe Banking as a New Acquisitional Model
Digital tribes, in simple terms, are online communities that share at least one common interest.
Social networks like Reddit have made it clear that communities will gather around even the most niche subjects, so is it too farfetched to extrapolate that the same will happen with financial services?
When traditional banking fails to meet the needs of a certain group of individuals, the added flexibility of digital banks can certainly make operations shift towards the people’s interests and deliver products better catered to them.
In turn, new acquisition models seem to be on the horizon as solutions can be crafted with a heavy focus on, for example, the available data on the merchant’s transactions, meaning that their actual possibilities will be taken into account.
However, as convenient as these new models seem to be, one shouldn’t discard that the disenchantment with traditional banking has led to another trend that Fintech companies might pick up on in 2023.
Autonomous Finance Apps, Crypto, and the Unavoidable Blockchain
Fintech apps in their essence embody the spirit of autonomous finance while the Blockchain is said to improve transparency in transactions by being a better conductor of clear traceable data.
In their flexibility and simplification of processes lies the key to granting individual investors effective and trustworthy services.
Possibilities are endless as custom financial plans can be crafted on the back of user data while AI can effectively manage their funds.
Combine that with crypto and who knows what might happen? Since cryptocurrencies seem bound to become a standard form of payment, it’s only a matter of time before these new tech avenues meet.
This leads to a major element prone to make waves in the future.
Biometrics
As users disperse across the many possibilities that the financial landscape offers, it will become quintessential that effective security solutions can consistently protect them against cybercrime.
The finance industry never takes the security of its users lightly.
And, as the blockchain inherently makes transactional data traceable, biometrics seem to be the winning horse in the race as user ID is indissoluble from the digital financial services themselves.
In fact, biometrics won’t solely be used for security purposes, as payments and customer services can be accessed through voice commands, meaning a whole new world of possibilities will open.
RegTech
If you’re not familiar with the acronym ESG, you will probably become acquainted with it in 2023.
It stands for Environmental, Social, and Governance, and therein will lie the focus of many regulations in the future.
As regulatory compliance is a necessity, so will both new and existing digital products need to adjust their approach.
Ultimately, the ESG shift captures the essence of the changes within the financial industry: the people, the processes, and the products.
Wrapping Up – Fintech Trends to Review
The future of fintech certainly looks bright. Picking up on user data and trends and converting them into actionable products is key.
Those who shift their models to a user-centric view seem to be in a prime position to take the lead in this highly competitive industry.
