Synergy and disruption: Ten fintech trends

We’ve seen the different phases of fintech evolve and anticipate a new wave of changes to unfold as new technologies and tools become engrained in our financial lives. As we begin 2023, we’re excited to see new innovations and solutions enter this space. Rest assured, your report will be delivered to your inbox within the next 72 hours. A member of our dedicated Client Success Team will proactively reach out to guide and assist you. We appreciate your trust and are committed to delivering precise and valuable research insights.

Years into the fintech boom, after many highs and lows, investors are becoming more selective. While overall funding remains at historically high levels, technology investors globally are increasingly investing in proven, later-stage companies that have shown promise in attaining meaningful scale and profits. Data compiled by PitchBook show that despite a clear increase in total VC funding, investments in early-stage fintechs decreased by more than half from a peak of more than 13,000 deals in 2014, to around 6,000 in 2017. The bar for funding is quickly rising, and companies with no clear path to monetization are going to have a harder time meeting it. Financial institutions are engaging with fintech start-ups either as investors or through strategic partnerships.

Blockchain in global finance make-over

In the wake of the Covid-19 pandemic, more and more businesses are turning to fintech to accept contactless payments or adopt other tech-fueled advancements. As with many emerging technology sectors, fintech can be an ambiguous concept due to the sheer breadth of tools, platforms and services that fall under its yawning umbrella. AI dominates the Gartner Hype Cycle, and in addition to threat exposure management, sustainable technology, and cloud, these trends will factor into business and technology decisions over the next three years.

• Similarly, Tencent provides a wide range of digital financial services on its pre-existing social platform.
• For instance, PayPal must be licensed in every state and follow local payment transmission regulations.
• Data-driven iteration, coupled with early and continuous user testing, has led to robust product-to-market fit for these firms.
• Several CBS fintechs have emerged, seeing legacy IT issues as a golden opportunity for disruption.
• Gartner reports 80% of finance leaders have already implemented RPA solutions in their business or have plans to do so.

Shifting traditional mindsets and operating models to deliver digital journeys at a start-up pace is no easy feat for a financial behemoth. Together, these speakers discuss verticalisation in fintech, a growing focus on financial fintech industry overview inclusion and an increased emphasis on portfolio optimisation. Now available on-demand, which you can access via this link, ‘Shaping the Future of Fintech’ analyses six major trends in the fintech industry today.

Banking

Another key part of embedded finance that’s on its way to becoming mainstream in 2022 is the buy-now-pay-later option. On Black Friday, PayPal facilitated around 750,000 BNPL transactions—a 400% increase from 2020. Further, incubators designed specifically for ESG-focused fintech solutions have emerged to cater to firms and organizations in this niche. The Monetary Authority of Singapore (MAS), for example, has joined hands with Google Cloud to launch the Point Carbon Zero Programme with an aim to support climate fintech innovation in Asia. Environmental, social and corporate governance, also known as ESG, is a domain that’s garnered considerable attention and huge influxes of investment funds in recent years.

Pindrop provides protection against data leakage, social engineering, and phishing. In 2021, Federal Reserve Chairman Jerome Powell said that cyberattacks are the number-one risk to the global financial system. In many instances, the hackers will get on the call and pretend to be the bank employee and gain access to confidential information from the caller. A bank employee spoke to a man he believed worked at another company, a person who he had spoken to on the phone on a prior occasion. The first major incident involving this type of strategy happened in 2019 when criminals used deep fake technologies to mimic the voice of an executive of an energy firm and requested a transfer of $243,000.

Neobanks Appeal to Young Consumers

I think this will lead to a positive maturation in the market, with a focus on transparency and consumer protection across crypto and fintech companies. The financial ecosystem has been changing significantly due to fintech, and this has significant implications for financial inclusion. Fintech is bringing about change by making it easier for underbanked and unbanked populations to obtain financial services.

The first truly digital natives, Gen Zers, will also figure a lot in the conversation of payment innovations. As it is, they are the first generation to see the onset of cashless transactions and are thus more at home with these innovations. Fintech leaders hold a pivotal role in advancing financial inclusion by prioritizing inclusivity in product design and promoting digital education by advocating for supportive policy frameworks and launching training initiatives.

For the UK, Prime Minister Rishi Sunak’s plans were revealed at the recent
King’s Speech where King Charles summarised priorities for 2024. Data was a clear focus, and the

Data Protection and Digital Information (DPDI) bill is expected to open the door to new technologies, while also ensuring all types of personal data can be securely shared within a trustworthy ecosystem. This is part of the EY Tech Trends series wherein each chapter will focus on the rising shifts in key technology areas and the impact of these technologies across sectors. Access to accurate and precise real-time data, coupled with more effective spend control and visibility, will enable businesses to spend smarter in 2023. This is the perfect opportunity to look ahead at the next 12 months and predict what’s in store. We asked a handful of industry insiders to dust off their crystal balls and tell us their predictions for the fintech sector in 2023.
With the introduction of digital solutions like direct transfers, fintech offers choices beyond what is currently available for the underbanked and unbanked. Open banking opens up many possibilities for banks, payment companies and other fintech firms looking to leverage the potential of customer data. Through open banking, customers have greater control over where they store their financial data while also being able to quickly transfer it between different organizations or allow third-party providers access to their data when necessary. Customers can make their purchases first and split out their payments over time with this service. As a result, experts predict that the market for embedded financial services will expand by 40.4% annually over the next several years.