In the last six years, the world has seen incredible
advances in fintech. From mobile payments to blockchain technology, these
innovations have changed the way we live our lives and conduct our business.
They have also transformed how we interact with technology
as a whole. For example, by making health care more accessible through
telemedicine and education more affordable through online platforms like
Coursera and Khan Academy.
However, there are many challenges facing fintech before it
can truly integrate into everyday life: security breaches; privacy issues;
minor technical hiccups; unequal access to financial services (especially for
those in developing countries).
These issues will require innovation in years to come. Read
on for a detailed breakdown of the next industry pivots.
Embedded finance is the next big thing in FinTech. The
concept of embedded finance is not new, but it has been gaining momentum
recently. Analytics estimate that this sector will grow by 40.4% per year.
The idea of embedded finance is that a customer can get more
value out of their purchase than just the product itself. In addition to the
product, they also get financing options, rewards points, or even access to
insurance coverage for their purchase. It's like getting a free gift with a
It is a type of financing that is built into the core of a
product or service. This can be done through the buy now pay later models such
as BNPL, or through loyalty programs with rewards points for spending money on
products and services.
BaaS (banking as a service)
As fintech is blooming, the next big thing will be BaaS
(banking as a service). It is a cloud-based platform that provides financial institutions
with the tools to build and deploy their own mobile apps, digital banking
services and other digital offerings.
It allows banks to leverage their existing investments in IT infrastructure while providing them with the flexibility to customize their features and functionality.
Advanced analytics, ML and AI in Fintech
Artificial intelligence (AI), machine learning (ML) and
advanced analytics are those technologies that analyze large data sets and
automate decision-making processes.
In fintech specifically, these advanced technologies help
process financial transactions with speed and accuracy that were previously not
possible. The potential for AI/ML impact on this industry is enormous.
Imagine an ATM that uses facial recognition technology to identify users. Or imagine a credit card fraud detection system that predicts which transactions are likely to contain fraudulent activity based on historical behavior patterns. All of these examples rely heavily on ML/AI technology behind the scenes.
Fintech for younger generations
The younger generation is more aware of the need for
financial services than ever before. With new technologies, the younger
generation has a higher willingness to manage their money and be financially
literate. It's important to focus on these consumers as they will be
instrumental in helping develop fintech products that target their unique
One example is bitcoin, which has become popular with
millennials because it allows them to make purchases online without having to
use traditional payment systems or credit cards. Bitcoin also gives users some
level of anonymity when making transactions due to its decentralized nature.
So it's possible that this payment method could create an environment where people feel safer about sharing personal information through digital channels like social media platforms such as Facebook and Twitter - especially if those social networks aren't secure enough for them.
As you can see, the fintech industry is growing
exponentially. The list of fintech startups that are changing the way we live
keeps expanding. Despite overall pullbacks in venture funding and shockwaves in
the crypto market, financial services remained the leading sector for venture
investment in 2022.
In fact, the global fintech market is worth approximately
$165.17 billion in 2023. By 2027, the industry value is expected to reach
277.22 billion. This growth can be attributed to several factors, including
massive investments from VCs and accelerators, increased R&D spending, a
higher level of startup activity, and partnerships between financial
institutions and technology companies.
Thus, there is a lot of potential for growth in the fintech
industry. It's important to remember that innovation is iterative. So even if
you're not working on something big today, it doesn't mean tomorrow won't bring
some worthy ideas.
Chief Growth Officer at SmartIT
Tim is a sales and marketing specialist, who solves business
challenges like an engineer by focusing on data insights, analyzing what works,
what doesn't, and what can be improved from a technical and financial
perspective. Over the years he has supported the transformation of new clients
into long-term partners and expanded services provided in the work space,
ultimately facilitating revenue generation and business success. Tim strongly
believes that you can't be in charge of the outcome and results. However, you
are 100% in charge of the input.