Technology is evolving at an unprecedented pace today. Undoubtedly, trends play a defining role in redefining the future of the tech-savvy world. Trends matter to make sure the growth isn’t turning out of whack. All of us keep an eye out on ‘what’s buzzing in the techie world’ to understand it better and get the most out of it. Don’t we?
Well, 2022 looks bright if we talk about trends across every domain. That being said, FinTech is no exception. If we look at the news, global FinTech funding has nearly doubled this year, said emarketer. As per Statista, the Neobanking segment is expected to show a revenue growth of 56.9% in 2022 and the number of users is expected to amount to 4,929.55m users by 2025 in the Digital Payments segment. The future of FinTech seems quite promising.
It’s overwhelming how FinTech has managed to transform itself in the last few years. It has made it quite evident that we will see bigger things in 2022. Given the changes happening in the FinTech space, here are the major trends you should be aware of.
Embedded finance is hot in FinTech. It enables organizations that are not necessarily financial entities to include financial products or services in their digital products. The objective is to streamline the overall financial process for customers and enhance efficiency for businesses. With an estimated market value of $3 billion by 2030, it’s clear that it’s not just a financial fad. It’s the future, as per Finextra.
It can solve customer pain points and provide usable business insights. Buy now, pay later, POS (point-of-service) lending, financial technology-as-a-service tools, and digital wallets are changing the future of finance. Some noteworthy examples of embedded finance are Amazon’s EMI loan options, Afterpay, and Klarna.
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BaaS platforms and services can deliver financial services using open banking concepts. It allows non-regulated entities to provide regulated financial services. BaaS market to reach $11.34 billion by 2030 as per Allied Market Research. BaaS is significant to traditional financial institutions navigating their way toward attaining digital transformation goals.
In 2022, we will see more collaborations between legacy financial entities and FinTech using BaaS services to bring innovation and enhance their offerings. Likewise, in banking, Neobanks is the next evolution of banking, and cloud banking is what financial services of the future would look like with cloud computing.
AI in Fintech Market to Surpass $46,881.9 Million Revenue by 2030, says P&S Intelligence. This staggering increase in the use of AI in the FinTech market showcases the future of FinTech smart. AI in the financial industry can drive innovation, improve personalization, strengthen security, enhance customer satisfaction, high-speed query resolution, user behavior analysis,, and fraud detection.
AI is redefining the ‘human touch’ in the FinTech industry and is reimagining innovation in the finance sector. Integrating AI within the FinTech offerings is crucial to paving the way for a seamless and consistent UX to become future-ready. In the FinTech domain, Machine Learning (ML), Data Mining, Big Data, and Deep Learning have considerably increased along with AI.
The global blockchain market size is expected to grow to USD 39.7 billion by 2025 according to PRNewswire. Blockchain has emerged as a critical innovation for digital transactions as a specific entity cannot control it but has distributed management. We will see the true potential of Blockchain this year by upping the efficiency of transactions without compromising on security.
The FinTech industry can’t afford to ignore Blockchain, given the advantages of speed, transparency, security, instant settlements, improved capital optimization, etc. If we talk about trends, Blockchain-as-a-Service (BAAS), Blockchain in social networking problems, interoperability, and Blockchain networks will be hot in Blockchain in FinTech in 2022.
CX is the next big thing in Fintech. As digital finance is gaining momentum, you will witness a lot of innovations that are laser-focused on delivering superior customer experience. The focus will be on providing them with highly personalized products and services. And data will play a critical role in achieving that objective.
Gamification, cloud adoption for security, chatbots and virtual assistants, real-time analytics, proactive customer support, omnichannel support, and humanizing digital experiences are set to explode in 2022 to improve customer experience.
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