For many years, the financial industry has seen technology make its way into everyday life. In 2023, you’ll keep seeing some exciting fintech trends develop and become more popular.
Fintech has helped the financial industry improve the way businesses operate. It’s made processes more efficient and, therefore, can save companies a lot of money. On top of that, data has gotten more accurate and readily available.
Keep reading as we highlight the 5 key fintech trends you should be watching for in 2023.
Blockchain is the first on our list for a reason. It’s been a massive breakthrough in technology that’s left a significant mark on the financial industry.
First, blockchain technology verifies each part of a transaction that’s recorded. That means transactions are accurate and virtually impossible to alter. The risk of fraud in the blockchain is very low because it’s difficult to make changes once something has been recorded.
This technology also saves money. Payment transactions can securely take place without human involvement. That cuts out the need for a third-party processor and can eliminate fees that they would normally charge.
Blockchain can also speed up payments, specifically for international or cross-border transactions. Items recorded on the blockchain are immediate and accurate. That means less time spent verifying bank information.
2. Real-Time Reporting
Business leaders are trying to stay up-to-date about company performance. Being able to see recent financial data helps managers make decisions to keep their company moving forward and profitable.
Instead of being reactive to financial data, fintech is allowing leaders to be proactive with real-time reports and up-to-date analysis. This trend will become the new norm as we keep moving into a digital future – and for a good reason.
Being able to see the best, most recent financial information on a company can help leaders make crucial changes as soon as they see a problem. Otherwise, a problem may go unnoticed for weeks.
3. Payment Innovations
One of the biggest fintech trends expected to keep growing in 2023 is mobile payment solutions. We’ve already seen larger companies, like Google, Apple, and Samsung, come out with mobile wallets.
Using a mobile wallet lets users store credit and debit card information digitally. Then, when it comes time to make a purchase, they can use the app on their phone to complete the transaction instead of using a physical credit card.
Mobile wallets can actually be safer than using an actual card. Payments made using a mobile wallet are encrypted, so your credit card information is never actually transmitted. Since it can decrease the risk of fraud, mobile wallets are only expected to gain popularity in the fintech world.
Another way that payments have made a digital transformation is with person-to-person payment apps like Venmo. Many banks also offer easy ways to digitally send money to other people through their apps. Some apps also offer instant transfers.
Between mobile wallets and person-to-person payment apps, more and more people are moving away from carrying cash.
4. Progressive Analysis using AI
As we move further into 2023, artificial intelligence is continuing to help the financial industry by providing analysis. It’s become a part of fintech that’s saving businesses money and improving efficiency.
Behind the scenes, AI has been helping banks and other financial institutions make decisions about their customers to better serve them. For example, AI can provide an analysis of customer behaviour. Then, using certain criteria, AI can predict which consumers are most likely to pay back a loan or determine the amount of a mortgage someone can afford.
Artificial intelligence can also help sell relevant services to customers. Using analysis, AI can determine which types of services are best suited for which customers. Being able to use AI this way helps financial service businesses stay competitive.
Credit card data can also be analysed in real-time using AI. Each swipe or payment can be easily tracked. That helps credit card providers predict, detect, and react to fraudulent activity on a much quicker timeline.
Chatbots are another form of AI that is using analytics to help consumers. Now, chatbots can help customers with very little human involvement. That saves companies money. Plus, they can serve more customers than if they only relied on human customer service.
5. The Cloud
Cloud-based software is no stranger to the fintech world. You can expect to keep seeing it as a big player throughout 2023. Companies are realising that cloud-based technology is becoming the new normal, and the financial industry isn’t immune to that.
The good news is that using the cloud has some major benefits for the finance world. Storing documents on the cloud can eliminate the need to keep paper copies of every document for several years. Instead, you can easily recall any document almost instantly on the cloud.
That helps during times of audit, too. Instead of digging out old files, the documents can be pulled and viewed digitally. There’s no mess to deal with and no clean-up involved afterwards.
Since using cloud-based technology reduces costs associated with storage, it can help keep financial institutions competitive. Online banking has become very popular because it offers convenience at a very low cost. The costs are kept low because online banking doesn’t require nearly as many overhead costs as traditional brick-and-mortar banks.
Fintech is an ever-evolving world, and the financial industry is only going to keep benefiting from it. This evolution can mean increased efficiency, cost savings, and a higher level of analysis to help customers and leaders.
Moving forward into 2023, you can expect to see more of these trends developing and making their way toward a new normal.