Top 5 Fintech Trends in 2023By: answerout
On many different levels, this year has been turbulent. Constant change has become the new normal for businesses all over the world, from the persistent pandemic outbreak to a war-induced energy crisis and the crypto market crash.
It is anticipated that the way people live and interact with one another will continue to change in the coming years. Here are some fintech trends for 2023 to keep an eye on in the financial technology sector.
Top Fintech Trends
AI and Fintech
Artificial intelligence (AI) was originally heralded as a future trend and has now permeated almost every aspect of the internet. However, as more applications include integrated AI programming, 2023 may be the year when it finally gains widespread use.
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As a result, AI and Fintechs will inevitably work together in the future as AI will be useful for a variety of purposes, including data storage, fraud protection, predictive modeling, user empowerment and experience, and so forth.
Though AI's potential is limitless and its effects on other sectors may be more severe, it won't be long until it also empowers the financial sector.
The most important development in payment innovations occurred during the COVID-19 pandemic when most transactions moved online due to social distance policies and health requirements. Mobile wallets, contactless credit and debit cards, and other financial technology initiatives have taken center stage as the main digital payment methods.
Using the introduction of Apple Pay, consumers of the company could quickly and conveniently pay for things with their iPhones and later, their Apple Watches. Following that, Google Pay and Samsung Pay joined the bandwagon. Fintech innovations will probably lead to further changes in the payment environment in certain sectors like government and education.
Traditional card networks currently accept digital currency as a mode of payment. For instance, Visa has partnerships with more than 65 cryptocurrencies. It only allowed bitcoin transactions worth above $2.5 billion in the last quarter of 2021.
Smart contracts enable parties to sign contracts using digital signatures—more specifically, cryptographic keys—that are represented in computer language. The execution of smart contracts is assured to be precise and predictable.
Because several computer devices will get an identical copy of the initial digital contract, the smart contract makes it difficult to verify the validity of the contract violation. It is known as a public blockchain, and it guarantees that the letter's contract will be fulfilled. This fintech movement will probably spread and transcend national boundaries, making smart contracts available to almost everyone.
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Sustainability and Fintech
The concept of sustainability cuts across all other themes discussed above. Nowadays, it is crucial for Fintechs to have a strategy that places sustainability and other CSR initiatives at the center.
As a result, carbon-neutral data centers that rely on renewable energy or even produce their own energy are proliferating. The need for sustainable practices is constant, and Fintechs who refuse to accept their responsibilities for corporate social responsibility will undoubtedly fall behind. Every sector out there, including Fintechs and other financial services, has to adopt greener procedures.
Statistics for the FinTech sector
In 2019, more than 47% of financial sector organizations included fintech in their future goals, according to the PCW Global FinTech Survey. In the COVID-19 era, Fintech was undergoing change and posing obstacles much like any other industry.
In 2020, interest in cryptocurrencies and blockchain grew significantly as a consequence. The new functions that crypto can play in the contemporary financial system are being investigated, tested, and discovered by businesses. The Fintech industry is anticipated to reach $161 billion or more by 2026, increasing at an 8.7% CAGR from 2021.
From the aforementioned, it is clear that fintech will disrupt the financial industry in many ways, including by boosting the use of payment gateways, offering credits, and facilitating commercial and personal transactions for people all over the world during COVID-19. Fintech will also increase eCommerce worldwide because of the far simpler account setups and no-fuzz transactions.
The continued population increase in countries like China and India will expand the reach of fintech into uncharted territory. The possibility that fintech will be much different from what it is now, say, in five years, increases when you take into account this plus the rising computer and internet penetration rates.