• Fintech Industry Trends for 2023

    Posted on 30-11-22 by Jack Woolsey

    Huda Altaee is a member of our  Technology Division specialising in ERP Systems recruitment.   Here she delves into the world of Fintech and shares her thoughts on the industry as the year comes to an end and 2023 is on the horizon.

    Fintech over the past year has been transformed by innovations such as company cards and joined up expense management software, new regulations and updated business models.

    It is a prominent customer-centric integration of technology, across both b2c & b2b fintech organisations. There are many trends speculating across the industry for 2023 and it is always good to get ahead and see as a business what is needed to keep up.

    This year we have seen companies work hard to make their services more personalised. 

    2023 will show this being continued through artificial intelligence #AI and machine learning #ML. There are many ways AI can improve customer experience, such as processing data faster, but the most obvious way is through personalisation.

    An example of this would be banks, many offer basic banking services but fail to accommodate the needs of their wider audience, this being millennials & gen z, who are looking for more than the standard money transfer & investment options.

    Customers are looking further into the companies services within the industry as there are hundreds of companies out there offering the same thing, they are wanting their financial products and service tailored to their needs, this is why companies need to look at investing in different ways they can provide their amenities to the consumer.

    By using AI-based algorithms they will be able to respond accordingly, looking at the patterns with each interaction. This means offering advice but only if it is relevant; tailoring offers to each customer based off of their previous purchases; providing notifications when the customer has reached a certain amount in there account and more. The steady rise of AI will make it easier for business to tailor their offerings, catering to the consumers demand for personalization. The only challenge will be to understand who their customers are so they can deliver the services across all channels and devices.

    Another trend that is likely to continue to dominate the fintech sector is #embeddedfinance 

    As digital forms of finance become a part of everyday life, embedded finance will continue to shape and lead the fintech landscape. This a trend we are already seeing with Apple Pay, Samsung Pay & Google Pay, which allows customers to use their phones or watches as payment devices at retail stores, restaurants and more.

    Powered by AI, embedded finance will also be important to investment advice & wealth management. AI has already proven its worth as an investment advisor by outperforming human traders in many areas of finance. By 2025, AI is expected to account for 35% of all trades, although it may only be able to partially replace human investment advisors.

    Money management will be vital for companies wanting to overlook their expenditures and reduce where they can. 

    The field of AI-driven money management has been around for some time now. By automating manual tasks usually done by people, not only makes the process more efficient, but effective . The benefits of intelligent application of #moneymanagement through software solutions are numerous:

    • It increases transparency. By having these solutions in place you will know exactly what went into each expenditure and why. This can help to identify areas where your strategy needs improvement or predict potential risks before they occur.
    • It reduces human error. Costly mistakes are seen through human error when managing your company’s spend. Companies can reduce the impact by using all-in-one spend management solutions. This type of solution not only saves hours of manual admin but can reduce errors with features that include highlighting any data mistakes when submitting receipts or flags for costly duplicate subscriptions. I am not sure if you have read about the man who committed fraud and was able to take $100 million from Google & Facebook by sending in a random invoice that was paid without questioning. Link to the article here: https://www.bbc.co.uk/news/technology-39744007 
    • It lowers costs. You can eliminate the need to add to your headcount to check through your finance processes by automating much of the work involved in your money management.

    Cybersecurity is on the rise.

    #cybersecurity 2.0 is a movement that aims to improve security through technological innovation while also improving efficiency & effectiveness through processes. These processes are through data security & privacy and Biometrics.

    As more companies adopt solutions such as cloud computing, they must focus on data security. As the information is stored on remote servers, this makes it vulnerable to external threats, thus an emphasis on the security and privacy of valuable customer data or sensitive information regarding employees & partners. Businesses must ensure GDPR is being met.

    An additional layer of protection against unauthorized access to sensitive information is by providing a biometrics system, which within recent years has become a growing necessity. #biometrics are unique physical characteristics that if compromised can’t change, making them more secure than traditional measures, such as passwords or PINs.

    By investing in the security system, companies are less liable to cyber threats and they can ensure that all their customers data is protected.

    There will be a rise of challenger banks. 

    This is a financial institution that offers traditional banking services but does not use a branch network, instead using technology to provide its services. Revolut is Europe’s most searched digital bank, ranking 1st out of the top 10 digital banks. They appeal to customers who want more of a choice regarding how they interact with their bank, using digital channels which have been seen to be more convenient in recent years especially during the pandemic.

    Since 2020, #challengerbanks have become an integral part of the financial landscape, especially with billions worth of capital funding in the last decade alone. However, this isn’t a revolution that just start-ups are a part of; existing banks are upping their technologies to serve their customers better. Traditional banking institutions are embracing fintech innovations and we will see this rise within the coming years, allowing them to create new verticals or divisions within their organisations to serve customers better.

    There will be a persistent push for decentralised finance into the mainstream. 

    In 2018, blockchain was a hot topic with investors and businesses as it is a decentralised database that maintains a continuously growing list of records that are linked together and secured using cryptography. This allows the company to store data securely without relying on third parties like banks or government, which lead to a potential disruption to other industries such as healthcare or insurance.

    As #blockchain offers a decentralised ledger system, it has no single point of failure, making it hard for hackers to get into the system. Blockchain technology is already being used in streamline transactions and it is expected to have a huge impact on the financial industry, in particular with payments & fraud prevention. Many countries will have a central bank backed digital currency, provided by blockchain to facilitate cross border transactions between countries worldwide by 2025.

    ESG initiatives in the fintech landscape. 

    More environmental, social and governance (ESG) initiatives are still relatively new but within the current climate we live in, 8 billion people on the planet, society is has become more aware of the resources of the planet and people look for companies that are more mindful.

    The initiatives are activities that companies can participate in to ensure that their business practices align with their values and beliefs. They help the company to also gain more visibility within their sector, by ensuring they stand out from their competitors by making them more attractive to potential customers who value a business that is ethical and responsible.

    There are several #ESG initiatives that companies can partake in to make them more sustainable, including: sustainable infrastructure projects; financial inclusion; and transition to low carbon economies.

    The global fintech industry is growing exponentially and by 2025 it is predicted to be valued at $305 billion (£267 billion). The fintech sector is going to continue to change the way we travel, bank, pay bills, manage funds etc. and these trends are expected to offer a better value proposition than the traditional systems and solutions many have been accustomed to. There is a new age of technology and I am excited to see what 2023 brings.

    If you are looking for your next career move in Fintech or the wider Technology sector you can view all our current vacancies here

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