The pandemic accelerated the processes of universal digitalization, and major tech players were able to make many formats of financial transactions digital and massive – thus leading to the explosive growth of fintech. The following fintech trends are quite reasonable – spending time and effort on modernization on its own can be more expensive and take more time than buying a ready-made solution.
Let’s talk about the most popular uses of fintech in 2022.
Minimizing Business Engagement in IT
Many large banks, non-financial companies, and even small startups pay attention to no-code and low-code development technologies, embedded and out-of-the-box solutions, and marketplace development services.
No-code platforms promise to make software development as easy as possible so that the average business owner can promote projects at no additional cost. Low-code development technologies still require some programming skills, but they promise to speed up software development by allowing developers to work with pre-written code components.
According to Gartner, 65% of developed apps will be low-code by 2024.
Embedded finance is a new trend in modern financial technologies that integrates payments on loans, insurance, debit cards, and investment instruments with almost any non-financial product. This is especially important for e-commerce, where profit and consumer loyalty depend on the speed of the transaction.
Marketplace development services are another way to reduce business involvement in development. For example, Citi, which invested in the startup Dextcloud last year, is building an IT solutions platform.
Niche Fintech Trends
Fintech services can be focused on representatives of a social group – it can be people of the same profession, age, territorial group, or level of income. They also provide certain services that can be useful to different people – for example, neobanks for controlling expenses, which can be used by both adults and children whose parents want to keep track of the child’s purchases. Niche trends initially appeared in the European market, where neobanks began to develop long before they spread around the world. Now, this trend has found its application in the American and Russian markets.
Terry Angelos, Senior Vice President and Head of Fintech at Visa, is confident that the niche fintech trends will continue. According to him, neobanks became the new “community banks” that existed in America half a century ago and served local communes. In 2021, thanks to the Internet and digitalization, the target audience can be anyone.
Universal Digital Payment Network
In 2020, many countries announced the possibility of the emergence of a digital currency, and some have already begun to develop it. Crypto should increase resilience and healthy competition in the financial arena amid the rivalry between banks, tech companies, and crypto systems. In addition, cryptocurrency has the potential to increase financial inclusion, as it offers a payment infrastructure with lower transaction costs.
It will be easier to control the monetary sphere due to the programmability and transparency of the digital currency.
China is the closest to launching a digital currency and is actively testing the digital yuan. The Chinese national blockchain project Blockchain Service Network (BSN) plans to build a universal digital payment network, or UDPN, based on various countries’ CBDCs (Central Bank Digital Currency).
Fintech in Emerging Markets
Due to the rapid digitalization of developing countries, many European startups have decided to expand into local markets. Railsbank, solarisBank, Wise, Revolut, and Rapyd are just a few of the European companies that have entered emerging markets over the past year. Several factors contributed to such a decision: the increasing number of mobile Internet users, friendly regulatory frameworks, and a significant amount of raised investments.
Social Commerce and Subscriptions
The convergence of social media and shopping services is becoming increasingly evident. According to ResearchAndMarkets estimates, the social commerce market will grow by an average of 30% annually and will reach $604.5 billion by 2027.
The largest social networks by the number of monthly active users in the US are Facebook, TikTok, Instagram, Facebook Messenger, and WhatsApp. All of these services have built-in purchase mechanisms.
Mobile Internet users can subscribe to literally everything – electronics, food, or events. Thus, subscription services and products such as recurring payments, services for managing subscriptions, and white label platforms are in demand.
Fintech meets a new era. The digitalization stage of classic banks is ending: traditional business models are no longer simply being adapted for digital channels. Instead, in 2022, we see digital-nativе scenarios where businesses are built on platforms and ecosystems. In the near future, fintech will find its use in other industries, giving them the opportunity to evolve and expand.