5 Fintech Trends You Should Be Watching In 2023

The fintech sector is constantly innovating new solutions and technologies to meet the needs of consumers, businesses, and regulatory bodies around the world.

The sector is always evolving with the changing market trends and the numerous socio-economic and political factors that shape both local markets and the global financial industry.

Every year we witness the rise of new fintech solutions as well as the advancement and improvement of tried-and-true technologies that are making new waves in the industry.

With 2023 right around the corner, now’s the time to examine the fintech trends that will dominate the industry next year and how they shape businesses, user experience, consumer demand, and government sectors worldwide.

Buy Now, Pay Later is Seeing Widespread Adoption

The Buy Now Pay Later (BNPL) concept has seen a lot of pushback in the last decade, as critics, finance experts, and consumers around the world deemed the model as a way to promote consumer culture in an unhealthy way.

It was assumed that BNPL would force people into debt and financial strife while feeding the global shopping addiction. However, nowadays, BNPL is seeing widespread adoption across the US, Europe, and the Ecommerce sector as a whole.

New POS Integrations

The ability for customers to pay for products and services later or in installments is an important part of marketing and sales psychology for many retailers. It prompts BNPL providers to optimize their solutions with new POS integrations, online checkout features, and loyalty perks.

This widespread adoption was born out of the pandemic and has now become one of the most popular ways for consumers to retain their previous purchasing power in the post-pandemic world.

Startup Funding with Regulation Crowdfunding

Regulation Crowdfunding allows companies to sell securities through crowdfunding. It is quickly becoming one of the most popular ways for startup leaders and entrepreneurs to gather financial resources through early adopters.

Key Advantage of Regulation Crowdfunding

One of the key advantages of regulation crowdfunding is that it banks on the support of early investors who are far more likely to stick around, unlike many VC investors, particularly when the company is going through a rough patch.

This type of crowdfunding also allows businesses to raise up to a million dollars in small increments from individual backers, who can buy in for as little as a hundred dollars.

The total amount that founders can crowdfund this way is five million dollars while retaining control of their company and avoiding going the traditional venture capital route. 

Regulation Crowdfunding requires proper marketing, brand-building investments, and following the industry marketing trends to align the crowdfunding content and campaigns with the needs and goals of the backers and the community as a whole.

Embedded Digital Fingerprinting and Credit Scoring

Banking institutions, online lenders, and various types of investors need an efficient, effective way to analyze potential clients and their loan applications, prevent scams, and automate the pre-approval process.

While this task can be time-consuming with a potentially high margin of error, new fintech technologies like digital fingerprinting and AI-driven credit scoring make the process more cost-effective across the fintech sector.

With digital fingerprinting, for example, institutions can quickly grab the key customer and user data directly from their website and feed that information into their detailed customer profiles and reports.

This data can include everything from device type to location, ISP, and cell phone carrier.

With smart credit scoring, which compiles additional data such as social media information, IP analysis, geodata, and income and spending power prediction, banks and lenders can quickly and accurately decide whether or not to trust a user.

The Rise of Cryptocurrency Exchanges 

Cryptocurrency has seen global adoption in the past decade. There is no denying that cryptocurrencies and the platforms they’re built on are the future of the global financial sector.

Not only are businesses expanding into ICO investments and accepting cryptocurrency payments in greater numbers, but service providers and brokers are also becoming more present in an increasingly complex industry.

For new cryptocurrency investors, navigating the industry can be daunting, especially now that malicious online activity and scams are prevalent in the sector.

New legitimate crypto exchanges have entered the competitive market to meet their rising demands. This move can help to prevent crypto scams and ensure a better experience for new traders.

Nevertheless, scam operations will continue to pop up at every corner, and aspiring investors and traders must work with trusted exchanges and fintech security companies to mitigate risk.

Ensuring Compliance With RegTech

Regtech, or regulatory technology, is a key sector in the fintech industry that ensures regulatory compliance for businesses and government financial institutions through specialized regulatory technology.

This tech typically provides users with comprehensive monitoring, reporting and data analysis, and compliance features.

AI and Deep Learning

Regtech has become increasingly sophisticated with AI and deep learning technologies to provide better automation and advanced software to boost data protection and expedite compliance processes while eliminating the risk of human error.

Needless to say, this technology and the advancements it brings to the industry are indispensable to growth-oriented businesses because it ensures the protection of the users and the sensitive data flowing across the global financial sector.

Over To You

The new fintech solutions, technologies, and trends open new opportunities for business leaders and customers worldwide.

From safer cryptocurrency trading to better digital payment options, all the way to efficient credit scoring for banks and compliance for the sector as a whole, exciting things are coming to fintech in 2023.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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