Are there any fintech surprises awaiting us in the following year? Looking at recent figures, we can say quite a few are in store. The fintech revenue on the global level has nearly doubled since 2017, and the whole fintech industry’s projected worth is about $180 billion.
The fintech industry shows no signs of slowing down but rather tends to integrate itself into our daily lives even more. With this in mind, here’s what you can expect in the year ahead and how it’ll affect you.
Improved AI finance software
While some may still prefer the experience of going into the bank’s physical offices and talking to the person in charge about loan approvals, their number will be even smaller in 2023.
Digital banking has been on the rise, and people actually enjoy getting approved (or rejected) by the program instead of having a human inspecting their credit scores and eligibility.
To this end, we expect AI algorithms to become even more sophisticated and to raise the unbiased bar even higher. A lot of effort will be invested in enhancing finance software to ensure a more ethical assessment of requests.
That is not to say there haven’t been AI-related issues so far. While AI decision-making should be impartial, there have been instances when women received less favorable offers than men despite their identical (or better) financial state.
Therefore, artificial intelligence in fintech still has plenty of room for improvement, something we should witness in 2023.
Virtual cards and wearables
Flaunting a platinum Visa is on its way to becoming obsolete when making a significant purchase. In 2023, if you wish to show off or simply follow the latest trend, you’ll be waving your mobile, watch, or other wearable in front of the counter.
It’s not only a matter of prestige, though. The coronavirus pandemic certainly left its mark, and the fact that the shop assistant will not be touching your credit or debit card is a great perk for many consumers.
Another advantage of contactless payments is that virtual cards offer more extensive security measures. What’s more, businesses have noticed substantial advantages in using virtual cards. They enable better funds tracking, i.e., it’s easier to assign funds to particular projects and monitor how the employees spend the given funds.
Therefore, there will be even more virtual card owners in 2023, thus adding to the global virtual card market growth of over 20% until 2030. We’ve already witnessed it in the previous year, so the rising trend should continue without interruptions.
BNPL (buy now, pay later) madness
The buy now, pay later method is slowly becoming a deal breaker for financial institutions, as more and more potential clients expect to see this (very favorable) option. For instance, even Deliveroo has started offering an “eat now, pay later” option. This only serves as an example of just how much people are getting used to this possibility.
All the evidence points out that BNPL will be taken for granted. Ultimately, it won’t be a special option but rather something that goes without saying.
Naturally, fintech companies will do their best to offer this service to their users as soon as possible, as millennials and Gen Z rush to use the convenient BNPL method.
Crypto going strong
This year, cryptocurrency fully justified the one word that often describes it — volatility. Bitcoin prices plummeted to below $20,000, a huge difference compared to the $69,000 mark reached only two years ago.
Yet, despite this substantial unexpected blow for blockchain technologies, fintech and cryptocurrencies seem to have a bright future together in 2023. As a new survey confirms, cryptocurrencies are still the preferred means of payment in international transfers, as 45% of the surveyed actively use crypto in this manner. Google and Coinbase are also discussing a partnership that would enable the clients to pay for services using crypto.
Consequently, and despite the colossal blow the blockchain industry has suffered in 2022, there will be plenty of room for crypto in the fintech sector.
Inclusion of digital tribes
Social media services tend to connect us with users of similar interests, thus aiding the creation of digital tribes — online communities with great potential as future fintech clients.
According to a Mambu financial report, the pandemic has left us with five distinctive digital tribes, each with its own specific set of values. Understanding and knowing them intimately will be crucial during 2023 and beyond.
That’s because financial services, like any others, tend to become more personalized to gain future customers’ trust. Recognizing and acknowledging the needs of those digital communities is definitely one of the 2023 goals for fintech companies.
We all bear witness that green and smart technologies go hand in hand. Not only is the planet enjoying the benefits of that combination, but almost anyone who has become a part of ESG (environmental, social, and governance) initiatives recognizes those technologies as essential.
Battling climate change has drawn immense funds (besides other earth-friendly actions), which is an inviting prospect for fintech companies.
Without a doubt, fintech companies with ESG mandates will show significant growth in 2023 in revenues and overall involvement. For instance, Google Cloud and the Monetary Authority of Singapore have decided to launch the Point Carbon Zero Programme with the goal of providing innovative fintech climate solutions.
All things considered, fintech is continuing its exponential growth in 2023, which is hardly a surprise. However, the above shows exactly why the fintech market has such great predictions — the opportunities for fintech growth and development are incredibly versatile.
From focusing on more sophisticated AI software and adjusting to powerful digital communities to receiving funds for environmental concerns, the fintech expansion continues with confidence in 2023.