Despite the disruptions from the Covid-19 pandemic, fintech met its 2021 trend predictions. The pandemic actually added extra fuel that livened up financial technology (fintech) and helped it live up to its potential.
Fintech trends are characterized by the proliferation of cutting-edge technologies and digital transformation. The innovative solutions have indeed revolutionized finance in inconceivable ways.
In 2021, the fintech industry almost doubled the entire investment received in 2020. At least 42 new unicorns were founded, and $210 billion was invested in fintech-oriented products making it a landmark victory for the year.
What then of the year 2022? There are a lot of activities and trends that are most likely to take the fintech sector by storm. The following are 5 fintech trends to watch out for in 2022 and beyond.
Virtual banks now offer P2P transfers, global payments, contactless MasterCard, and much more. Aside from these, users can now buy and sell Bitcoin, Ethereum, and multiple other cryptocurrencies.
It’s easier to open and maintain an online bank than to walk into a branch to transact. In fact, most digital-only banking transactions are free, there are no brick and mortar bank branches to visit nor paperwork to deal with. You can pay your bills, reset pins, and get real-time analytics in the comfort of your home. This has led to the proliferation of online banks such as Revolut, Monese, Moven, FirstDirect, and HelloBank, among dozens of others.
Blockchain technology has a huge global reach, and its objective is to change the face of financial transactions. If this adoption continues, the global economy may hit $1.76 trillion in the next 10 years, and both the US and China are expected to benefit the most from this technology.
The banking industry has the highest distribution, followed by process manufacturing, discrete manufacturing, and professional services. Further, the adoption of blockchain wallets has stirred a bullish rush by investors. It’s projected that blockchain technologies will have a global adoption across economies worldwide by 2025.
Banks are actively fine-tuning AI solution strategies even as their revenues exceed income from some nations. Indeed the increased adoption of AI and the projection that the technology will reduce the banking institutions’ operating costs by close to 22% by the end of 2030 indicates that the industry will save approximately $1 trillion.
However, this path is unclear due to the shortage of AI-skilled professionals. This fintech trend shows that AI is geared toward dealing with escalating issues such as financial fraud threats, cybercrime, and much more.
Further, the technology provides financial institutions with the best customer service software, such as chatbots and several other smart systems. These innovations will allow faster transactions and a lot of convenience for customers.
These include components like contactless payments, mobile payments, mobile wallets, identity verification technologies, smart speaker systems, machine learning, and AI for security. Transactions shifted online during the health crisis that began in 2020. As a result, mobile payments now cover online purchasing, thus the tremendous increase in in-store transactions and global eCommerce transactions in 2022 and beyond.
Actually, Gen Zers are the key driver of payment disruption. They’re the first generation to witness the start of cashless transactions and are comfortable with such innovations.
Fintech promises numerous benefits to countries and individual consumers. Marginalized players have for years been pushed behind the mainstream. However, fintech, because of its proper planning ad new technologies, is pulling them out.
Indeed the Alliance for Financial Inclusion (AFI) is geared toward ensuring that fintech pulls along large sectors of societies as it continues to transform the global economy. In 2017, Accenture and Microsoft started an initiative to provide a blockchain-based ID network targeting refugees and illegal aliens, and people without any government-issued documents. The extensive undertaking targets at least 1.1 billion globally.
Therefore financial inclusion is a fintech trend that encourages the sector to help marginalized sections of societies. Various initiatives are actually being established to actively push for rules to promote fintech inclusion.
Fintech is set to revolutionize the financial sector in multiple ways. It will vastly boost the eCommerce sector. These fintech trends show that technologies will take innovative solutions to unknown territories even as the world population continues to grow.
The increase in internet penetration and computing indicates that the current generation will likely see a lot more fintech solutions going forward. The eCommerce sector is set to benefit more due to the increased use of payment gateways and much more.