The fintech industry is proliferating with global funding increasing by 96% over the past year. As more technological innovations in this sector are evolving, the more fintech businesses become “decacorns” (companies valued at more than $10 million.)
Users of financial services are gradually moving to the digital sphere preferring online services over traditional ones. This encourages finance companies to make quick decisions, integrate the latest technologies into their services, and constantly improve their customer services.
At Onix, we have more than 20 years of experience developing digital solutions for fintech. This helps us know financial market tendencies to accurately predict what features will be a trend.
What fintech trends will shape the industry and influence the decision-making of the finance business in 2023 and beyond?
Let’s look at our predictions concerning the future technology trends of the fintech industry.
Read also: How to Build a Banking App in 2022
According to a report by Business Insider, BNPL services are one of the fastest-growing trends in fintech. BNPL allows customers to defer payment for goods or services purchased online or in-store. The report predicts that the global BNPL market will grow from $24 billion in 2020 to $67 billion by 2025.
There are a number of reasons why BNPL is becoming so popular. First, it offers customers a convenient way to manage their finances. Second, it can help businesses boost sales and encourage customer loyalty. And third, BNPL companies are able to offer competitive interest rates and payment terms.
There's no doubt that contactless technologies are on the rise in the world of fintech. Consumers are increasingly demanding faster, more convenient ways to pay for goods and services, and contactless payments offer just that. In addition, with the proliferation of mobile devices equipped with NFC (near-field communication) technology, it's easier than ever for consumers to make contactless payments.
In the U.S., Apple Pay, Google Pay, and Samsung Pay are all major players in the contactless payments space. And according to a report from PwC, global mobile payment transactions are expected to reach $1.08 trillion by 2022-23, up from $396 billion in 2017.
There are a number of factors driving the growth of contactless payments. One is the continued adoption of EMV chip cards. These cards are more secure than traditional magnetic stripe cards, and as a result, many retailers are now requiring customers to use them. This is especially true in Europe, where EMV chip cards have been widely used for years.
Another factor driving the growth of contactless payments is the increasing acceptance of NFC-enabled mobile devices as a form of payment. In fact, many retailers now have NFC terminals that allow customers to make contactless payments with their smartphones or smartwatches. And as more and more consumers get used to using their mobile devices for payments, we can expect to see even more growth in this area.
So, what does the future hold for contactless payments? It's hard to say for sure, but one thing is certain: they're here to stay. And as more and more consumers adopt them, we can expect to see even more growth in the years to come.
A super app is defined as an app that provides a wide range of services and is used by a large number of people. In other words, it is an all-in-one solution that meets the needs of its users. Super apps are becoming increasingly popular, especially in the fintech space. Fintech is an industry that is ripe for disruption and super apps are well-positioned to do just that.
There are a few key reasons why super apps are becoming so popular in the fintech space. First, they provide a one-stop-shop for all of your fintech needs. This is convenient for users who want to be able to access all of their fintech services in one place.
Second, super apps often have a wide range of partners. This gives users access to a variety of services and products that they might not otherwise be able to find in one place.
Third, super apps are often built with a mobile-first mindset. This means that they are designed to be used on smartphones and other mobile devices. This is important because more and more people are using their smartphones as their primary devices for accessing the internet and conducting financial transactions.
Fourth, super apps often have a lower barrier to entry than traditional fintech companies. This is because they are built on existing platforms such as messaging apps or social networks. This makes it easier for users to get started with using the app.
Finally, super apps tend to be more nimble than traditional fintech companies. This means that they can quickly adapt to changing needs and demands of their users.
Today competition among banks is increasing, making them look for new opportunities to stay afloat. The competition for each client, the need to reduce maintenance costs, and current technological opportunities have all given rise to the latest fintech trend - neobank. A neobank is an online bank that doesn’t have branches or physical representations. Communication and customer service are carried out electronically through smartphones, tablets, or personal computers. Neobanks usually receive banking licenses or work as a junior partner of an existing traditional bank.
There are currently about 70 neobanks globally, 40 of which are located in the UK. Moreover, Sweden will become the first country to stop using cash by 2023, and the rest are likely to follow this trend in the future. Thus, more and more new banks today are choosing a digital-only approach. The number of neobanks’ users will double from 2020 to 2024, according to an eMarketer report. Moreover, Galileo’s 2021 State of Consumer Banking and Money survey states that 62% of Americans are likely to use digital-only banks in 2022. Since even older generations are interacting more confidently with technology from year to year, the transition to digital banking is becoming almost inevitable in the future.
The most popular neobanks in the world today include Revolut, Monzo, Statrys, #26, Atom bank, Cleo, and others.
Wonder why they win the competition over traditional banks? Here are some answers:
Embedded finance is a new fintech technology trend that will grow rapidly in 2023.
The idea of embedded finance is to integrate payments for loans, insurance, debit cards, and investment instruments with almost any non-financial platform. Embedded finance services are especially beneficial for e-commerce businesses since they facilitate the speed of transactions, therefore, helping increase customer loyalty. Previously, clients had to go to the bank for a loan, put in a request, pass an assessment procedure, and wait for the approval.
But today, with embedded finance, customers can get credit and purchase whatever they need in a few clicks on a store's website. The forecast for this trend is impressive, especially for embedded payments.
Embedded payments are used in various spheres. For example, today, users don’t have to pay in cash for their rides.
They can use ride-sharing apps like Lyft or Uber with embedded payment options. Or another example is the Starbucks coffee chain that allows customers to pay for orders directly from their app.
Embedded insurance is one more emerging trend. For instance, you don’t need to contact a broker to get insurance when you buy a Tesla car. This option is already embedded into a purchase.
All of these embedded finance solutions will benefit fintech organizations and banks and at the same time encourage healthy competition in financial and other industries.
McKinsey states that the number of open banking users doubled in 2020, so this trend is definitely worth paying attention to.
Open banking refers to an initiative by which banks can share clients’ data with fintech companies and other financial institutions. Data sharing can be done through programming interfaces (APIs) that give the site or app access to the bank's database.
One may wonder why traditional banks would share their data with other institutions? Paradoxically, open banking helps banks stay competitive. This way, banks can provide better service and the widest opportunities to the end-user.
For example, open banking will allow you to create applications that contain all the financial information from different banks in one place. Users will be able to receive their salary on a card of one bank, save money in another, and pay with the bank's card with the highest cashback reward. With the help of open banking, companies can implement an account aggregator. The users can access all their accounts through one convenient application (good examples are Tink and Plaid).
Financial institutions can also benefit from open banking.
For example, lenders can quickly assess the risks of lending to a client or personalize loan interest rates for them. Below you can see some interesting stats about open banking.
Blockchain is a relatively new technology trend in fintech with excellent prospects in years to come. Recently, Deloitte made a Global Blockchain Survey where 76 percent of survey participants said they believe digital assets might replace fiat money in the next 5-10 years. Blockchain technology allows companies to protect data, conduct verification and identification, register transactions, sign contracts, and enhance traceability. This technology is beneficial for financial services due to its safety and reliability.
The idea of decentralized finance has been discussed for many years. Today, financial systems operate centrally: banks and financial institutions act as intermediaries in the lending process and, if necessary, enforce the contract. But what will happen if we create a system in which everyone can freely use financial products without the mediation of banks and brokers?
In the coming years, fintech companies will build a new ecosystem that will change every financial sector: from stock trading to insurance. Supporters of decentralization insist that it will reduce the risks of large-scale financial crises because the finances of entire countries will no longer depend on a few large banks.
In theory, the blockchain should be the critical technology to creating such a system. The data stored through Blockchain can’t be changed or deleted, so it provides transparency, anonymity, and transaction security for all parties.
With at least $40 billion worth of assets held in cryptocurrencies and decentralized finance today, we all have seen explosive growth in the value of Ethereum and Bitcoin throughout 2021. It is already a global trend that impacts macroeconomics. Here are some statistics that indicate Blockchain is one of the top fintech trends for the future years.
Speaking of the latest fintech trends, we can’t forget to mention Big Data. Big Data in finance refers to vast arrays of structured and unstructured data that banks and financial institutions can use to predict consumer behavior and develop strategies. Every second, the financial sector receives, processes, and generates huge amounts of data. Structured data is information stored internally within a company to provide key data for decision-making at the right time. Unstructured data is accumulated from various sources in an ever-increasing amount, providing significant analytical potential.
Modern financial technologies make it possible to use Big Data to predict customer behavior and create complex risk assessments, which distinguishes them from traditional financial institutions.
Here is how Big Data can benefit the finance world in 2022:
State bodies and financial markets put forward their requirements for banking organizations. There are so many of these rules that companies often struggle to comply. Thus, businesses spend huge sums on lawyers to manage this process or pay fines if they are not meeting the fintech regulations. Following every rule is impossible, especially when the list of these laws grows steadily. That’s why regtech is growing in demand today. It allows financial companies to track the correctness and legality of their operations automatically.
Regtech's tasks include identifying clients, processing and protecting data, and analyzing financial risks. This helps to comply with legal regulations and avoid fines.
Due to automation, Big Data, and Machine Learning, regtech allows processing vast amounts of regulatory requirements every second in relation to each line of business. These automated solutions are programmed to constantly explore and look for historical data patterns. Thus, it becomes easier to identify problematic cases or detect fraud using regulatory technologies.
Fintech cybersecurity never loses its importance and becomes one of the main fintech market trends. Financial data is sensitive and extra vulnerable to cyber threats. A data breach can cost financial businesses a lot. Here are some stats:
Due to the increasing vulnerabilities and cyberattack risks in the fintech industry, advanced security measures will develop every year. The biometrics market size will reach almost $25 billion in the next few years, according to Grand View Research.
The COVID-19 pandemic is changing the way the world approaches information protection. Fingerprinting is one of the hottest technologies right now, but people are looking for new contactless ways to protect their data and recognize their identity. In 2022, systems for recognizing the voice, retina, ears, the pattern of veins on the hands, and even DNA will evolve. It’s expected that there will be a rise in industry-specific biometric solutions. For example, finance organizations now consider multifactor biometric authentication for mobile banking. With this type of authentication, mobile devices will identify the user by face and voice recognition at once. This will result in higher security and the inability to spoof a real user.
The fintech industry is constantly evolving and changing. As new technologies and ideas emerge, the landscape of asset management also changes. Here are some of the latest trends in fintech that are shaping the future of asset management:
One of the most talked-about innovations in recent years is blockchain technology. Created as the underlying technology for Bitcoin, blockchain is a distributed database that allows for secure, transparent, and tamper-proof transactions.
This same concept can be applied to asset management where it can create a more efficient and secure way to track and manage assets. For example, blockchain could create a digital ledger of all assets which would be accessible to all parties involved in the transaction. This could streamline asset management from asset registration to settlement.
Another trend gaining traction in the fintech world is big data analytics. With the advent of new technologies, there is now a vast amount of data available that can be used to gain insights into financial markets.
Asset managers can use big data analytics to understand market trends better, identify opportunities and risks, and make more informed investment decisions. This is already starting to happen, as some asset managers are using machine learning algorithms to automatically trade on behalf of clients.
Robo-advisors are another fintech trend that is starting to impact asset management. A robo-advisor is a computer program that provides automated investment advice, based on algorithms and data.
Robo-advisors can provide a more personalized and tailored investment experience for clients, as they can consider factors such as risk tolerance and investment goals.
Alternative data is another area where fintech is having an impact on asset management. Alternative data includes data not typically used in financial analysis, such as social media data, satellite images, and weather data.
Asset managers are starting to use alternative data to gain insights into consumer behavior, economic trends, and political risk. This data can be used to make informed investment decisions and generate client alpha.
Cryptocurrencies are another area where fintech has a significant impact. Asset managers explore ways to invest in cryptocurrencies. For example, some of them are launching cryptocurrency-focused hedge funds. Others are offering cryptocurrency investments as part of their broader product offerings.
Onix is a software development company that knows the latest trends and uses them in its work. We specialize in developing fintech software, trading platforms, e-commerce solutions, and payment systems. Onix has a team of experienced developers who are well-versed in the latest fintech trends and technologies.
One of the most popular fintech trends that Onix uses is blockchain technology. Onix has used blockchain to develop a number of trading platforms and payment systems. Another fintech trend that Onix uses is artificial intelligence (AI). AI is increasingly used in the financial sector to automate tasks and make better decisions.
Onix has used AI to develop several tools and applications that help its clients trade more efficiently and make better investment decisions. One such project where we used AI is Raiz Invest. It’s a micro-investment application that helps customers save and invest small amounts regularly. AI algorithms detect suspicious or unusual account activity and notify users about that.
“Onix has always performed exceptionally well on projects for us, keeping us well informed during the process. They are easy to work with, have good communication skills, and are very reliable. Onix has good problem-solving skills and a can-do attitude, so issues are quickly resolved, which keeps projects moving on time. They have a deep understanding of their areas of expertise.”
founder, CEO, and Managing Director of Raiz
The possibilities of fintech are endless as innovation is based on constantly evolving emerging technologies. Consumers want to receive better and more diverse financial services, and companies strive to cover these needs. Based on our in-depth experience in fintech product development, we can say confidently that following the fintech trends and incorporating the technology in your business is vital to staying afloat.
At Onix, we help develop investment management solutions, card and payment systems, digital and mobile banking products, financial and payment services apps, and web/mobile app development for financial institutions. Read Also: How to start a neobank
We believe that employing innovative technologies like blockchain, artificial intelligence, machine learning, and robotic process automation is essential for banks, lenders, and startups to prosper and thrive. Being up-to-date helps organizations provide a great customer experience, reduce costs, automate routine tasks, and ensure high data protection.
If you’re looking for a professional development team to integrate fintech trends and grow your business, just drop us a line. We’re here to help.
There is no one-size-fits-all answer to this question, as the development of fintech varies greatly from country to country. However, overall, it seems that fintech is indeed a growing industry. This is evident in the increasing investment and interest in fintech startups globally, as well as the emergence of new fintech hubs around the world.
In terms of specific countries, the fintech industry is booming in China, where numerous startups have emerged in recent years. In the United States, fintech investment reached a new high in 2016. So overall, fintech is very much a growing industry globally.
In the years to come, we can expect fintech to become more ingrained in our everyday lives. Financial services will become more personalized and convenient thanks to advances in artificial intelligence and machine learning. As we move towards a cashless society, fintech will play an increasingly important role in facilitating transactions and keeping track of our money.
As the sector matures, we can also expect to see consolidation, with the larger, more established companies acquiring smaller startups. This could lead to a more uniform landscape, but it also has the potential to stifle innovation. So it will be crucial for developers to continue pushing boundaries and exploring new ways to use technology to improve our financial lives.
Some of the most accessible and straightforward technologies in fintech include mobile payments, peer-to-peer (P2P) payments, and money transfer services. These technologies make it easy for people to send and receive payments without having to go through a traditional financial institution. Additionally, they can often be used without incurring any fees.