While the global COVID-19 outbreak dominated the previous year, the FinTech industry made significant progress, with 2021 proving to be a record-breaking year for its growth. With nearly $132 billion in worldwide capital raised last year, the industry is thriving.
From interest rates and cryptocurrency to consumer transactions and electronic wealth management, FinTech is exploding at a rapid speed. But what can we expect in the following year? What is certain is that we will see new ideas as well as improvements to old ones. Contactless banking and user safety will be fine-tuned, while concerns like sustainability and inclusivity will be given the attention they deserve.
Let’s dive in deeper! Here are some trends that will likely dominate and transform the market in 2022.
Rise In Cashless Transactions
So far, Canada looks to be in the lead, having been named the world’s most cashless nation with a score of 79.1%, followed by Hong Kong (76.8%) and Singapore (76.2%). They’re up against some stiff competition, with Sweden on track to go cashless entirely by 2023.
Several governments that want to go completely cashless are ready to tout the numerous benefits of employing non-banknote payment options. For starters, it is more convenient for both sellers and customers since they do not have to give change, and it maximizes efficiency because neither needs to carry or manage actual money. Furthermore, because there is no actual money to steal, certain types of criminal conduct are discouraged.
There’s also the question of privacy because you’re always leaving a trail of purchases and transactions. Hackers may be able to get more personal information from consumers. And not everyone has the technical skills needed to survive in such a technologically advanced cashless world. Fintech companies, without a doubt, are all about finding new solutions, and 2022 may be the year when we witness new emerging innovations quickly solving these concerns.
AI & ML
Unsurprisingly, AI and machine learning have made their way into the FinTech industry. Such companies are heavily investing in AI and machine learning techniques in order to increase their capacity to deliver simplified and automated services, which might lead to faster customer transactions and interactions.
What about security? Artificial intelligence (AI) is a sort of technology capable of detecting (and preventing) fraud in real-time. Consider the case where a big transaction deviates from a user’s regular spending patterns. In such an instance, the system can immediately flag it, prompting the customer to acknowledge it with an instant alert. Another wonderful use is determining whether or not a prospect is a suitable fit for a loan based on a thorough examination of his or her prior behaviors and tendencies.
AI and ML help organizations handle large data sets more quickly, allowing them to deliver precise and detail-oriented outcomes while providing services to clients using data-driven algorithms. This is most typically seen in insurance policies and customer evaluations of those who use their services.
International transactions, made possible by the rise of eCommerce, open up huge growth opportunities for small businesses outside of their local market, allowing them to serve a larger consumer base in many currencies in real-time. Around 40% of large companies in the United States have integrated real-time payments in their financial operations. It’s what you’d anticipate. We’ve been thrust into a new world of cross-border commerce, where clients expect simple and quick payment alternatives as a standard.
Blockchain Impact On Companies
Bitcoin, Litecoin, Zcash, and the other 4000 cryptocurrencies are all powered by blockchain, making it one of the most important modern financial innovations, for example you can purchase crypto with paypal account. Blockchain is reshaping FinTech in a variety of ways.
Although financial companies have been slow to implement Blockchain, it is still a big trend that is predicted to grow in 2022. Indeed, we are seeing an increase in blockchain-based companies and the use of crypto technology in a variety of industries. Given the numerous benefits, it’s easy to see why Blockchain is a trend that no business can afford to ignore.
Concept Buy Now-Pay Later
New payment solutions are being embraced at a quicker rate than ever before, thanks to the rise in popularity and adoration of online shopping, as well as the entrance of new generations online. Consider using a service like Paypal or Afterpay to make a purchase now and pay later. This is an interest-free payment option that allows a buyer to postpone or even pay in installments for a commodity or service. The Buy Now, Pay Later concept is at the heart of many emerging FinTech companies that seek to be one step ahead of the competition by offering a novel way to pay for products and services.
FinTech Focusing On ESG
FinTechs with ESG features, such as those concentrating on global warming, emission reductions, and sustainable consumption, will definitely receive substantial attention as environmental, social, and governance (ESG) awareness grows across the spectrum.
The list could go on and on, and this is by no means a complete list of things to expect from the FinTech industry this year. We didn’t even get around to talking about developing countries and how FinTech companies would most likely change their attention to conducting and closing more deals in these regions.
We can all agree that Fintech is a forward-thinking industry that is undergoing development. This field has a huge impact on our lives and well-being. Clearly, companies in this industry understand their role as a source of tremendous possibility and growth in the financial world and among countless individuals.