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Top fintech predictions for 2023

by uma
Editorial & Advertiser disclosure

 

By Nigel Green, deVere Group CEO & Founder

Despite a turbulent time generally for investors in 2022, investment and interest in fintech has grown significantly this year as it continues to reshape and redefine how financial services are delivered across the board.

As we now look to 2023, here are some fintech predictions for the year ahead.

First, traditional banks will be increasingly forced into the space.

They have been in a perpetual game of ‘catch-up’ in recent years amid evolving customer expectations, regulatory requirements and tech advances and this is only expected to pick-up momentum.  Why? Two reasons: first, millennials as they are the fastest-growing cohort of clients; and second, because they are becoming the beneficiaries of the Greatest Transfer of Wealth in history.

According to some estimates, $68tn in wealth is to be passed down from the baby boomers – the wealthiest generation ever – to their children and other heirs (millennials) over the next few decades.

Millennials have grown up on technology. They are ‘digital natives’. They’ve been influenced by the enormous surge in tech as they came into adulthood – which came around the same time of the global financial crash that hit in 2008. Against this backdrop, they seemingly became comfortable using fintech to help them access, manage and use their money rather than using a traditional bank.

Indeed, according to a Facebook white paper entitled “Millennials + money: The unfiltered journey,” 92% of millennials distrust banks and many view them as an unreliable source of information.

Mobile-first millennials expect easy, immediate access and control of their finances in the palm of their hand. They demand to be able to transfer money and pay bills in one tap or swipe. They want to be able to review their spending habits, be offered guidance, and have real-time access.

Banks, finally, are becoming aware of this.

Second, there will be greater regulatory scrutiny.

This will come about as fintech services are increasingly embedded within non-regulated entities. As such, watchdogs around the world will be seeking to further protect customers by ramping up regulations, with a particular focus on accountability and transparency.

Third, data will become ever more important. There will be growing emphasis on exploring new methods to collect, analyse, and utilise it in order to differentiate companies’ client-based propositions.

And fourth, Asia will continue to be at the heart of the fintech revolution.

I attribute this to several key factors. These include a proactive approach to innovation by regulators; the plethora of virtual banks; the development of the wider tech ecosystem, especially application programming interfaces (API); and the influx of Chinese financial and tech giants into the sector.

Even though the world is teetering on the edge of a global recession, we expect fintech investment will continue to build momentum in 2023 because it improves customer experience and is increasingly demanded. It also helps corporates increase efficiency, increase productivity, lower operational costs, and improve competitive advantage.

 

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