Being a comparatively new technology, FinTech has already taken a strong position in the industry. And, it’s only natural that it evolves and changes. With the new technological solutions on the market, the fintech and banking industry is getting the best of it. Though many of the FinTech trends in 2023 were not particularly new to us, they rather gained even more popularity, and some of them continue to do so.
Too much security is never enough
In the last years, the obsession with cybersecurity became a real thing. And, for a good reason. Even the companies that were skeptical about the need to protect their information in the past have changed their minds. Many got strongly affected by the Equifax breach. So, naturally, concern about the data security became a top one priority in the fintech industry. A lot of fintech companies have confirmed that they are not protected well enough. At the same time, quite a few companies expect a cyber attack to be performed on them in 2023.
The average cost of a cyber attack is said to be about $5 million. It’s an astonishing amount of money for a small company in the financial sector. However, the reasons for such an approximation include the value of the information, loss of reputation, and the cost of the staff to mitigate the effects. The reaction of various companies was immediate. Billions of dollars were spent in 2021-2022 on cybersecurity, making it one of the top Financial Technology trends.
The issue which arises along with this is the lack of well-trained security specialists in the field. ISACA expects a shortage of two million professionals by 2023. This may cause the prices for the cybersecurity services to rise and give the way to not-so-qualified folks. So, be careful who you hire to keep your and your customers’ information safe.
Blockchain is still on
It seems like the Blockchain technology has made its way to most of our frequently used services. This is one of the FinTech trends that we expect to see in 2023, and beyond. Blockchain has stopped being the only cryptocurrencies platform a long time ago. In fact, some of the companies are building their own Blockchain platforms. The great thing is that the possibilities are roughly endless. The bad thing is again, the lack of specialists, however, is not as critical as with the cybersecurity.
The reasons for Blockchain popularity are more than plenty. Here are just a few of them:
- The technology allows for transparency in making deals and performing financial operations. All the information is accessible and extremely hard to compromise. This provides yet an additional layer of security to every party involved.
- Smart Contracts could probably be called one of the emerging trends in financial services. The advantages include the speed of performing operations and the lack of actual paperwork required. But, this solution is still in the early stages of development. Especially, when we are talking about a need to operate with physical objects in the real world.
- The solution to the latter has been found within the Internet Of Things (IoT). The possibilities are still being explored as well as the security level of this option.
FinTech going mobile
For many people globally mobile phones have become part of their daily routine. In many cases, the phones have eliminated the necessity of a PC usage. The finance field is not an exception. Developing and improving solutions for smartphones is among the top banking technology trends. Many banks and financial institutions created applications for their users. These apps allow performing money transfers, online payments, operations with cards, and many more.
In the current digital era, people prefer to be able to do whatever possible on the go and without too much effort. And, the industry delivers. Most importantly, top priorities of this trend are usability and customization. Creating a user-friendly application can significantly affect your business position on the market. Best solutions are generally the simplest. The field of application for such apps is not limited by banking operations. Another of Fintech industry 2023 improvements is the creation of apps for managing finances, cryptocurrencies, and even calculating your spendings.
The Artificial Intelligence (AI) technology is changing our lives and the way we interact with things and each other. Now, the AI has come to the finance field and is likely to become one of the burning FinTech trends in 2023. The creation of personal digital assistants has put a start to financial advisors development. Financial institutions are investing in the creation of chatbots that are capable of not only answering the frequently asked questions, but also to give some advice.
Powered by the AI, the bots can analyze the financial information of the customer, and provide them with the statistics, calculate their spendings, or advise on any further purchases. The bots are capable of learning and improving. According to CNBC, chatbots are going to reduce business costs by $8billion in the next few years.
ICOs are in the big game
A lot of investors started treating ICOs more carefully, and do not rush to put their money in the next best thing. Nevertheless, this absolutely doesn’t mean that ICOs are going down. On the contrary, the number of fake and failed offerings gave a new spin to one of the biggest financial services technology trends. The situation called for a need of the system improvement. This includes the growing number of analytical and advisory services as well as agencies.
Billions of dollars are being invested in potentially successful projects around the world. This in return brings us innovations in various fields. One of the greatest things about ICOs is that investments can be made by anyone. The experienced investors, of course, have an advantage of calculating their risks better. But, this does not stop the rest of us making a move.
GDPR effects on FinTech
Introduced in late May 2018, GDPR became the latest addition to rules and compliances in various spheres. Companies and countries have spent some wowing amounts to incorporate the changes into their systems. Even though the regulations were originally placed in Europe, the rest of the world got sucked into these changes as well. This is particularly true for businesses working in the European market.
Cryptocurrencies are still a thing
Cryptocurrencies were treated skeptically by many when they first entered the market. Nowadays, many countries have their own digital money and some currencies are internationally accepted. Not to mention that they are generally quite expensive. Some companies already accept popular currencies like Bitcoin to pay for their services. Some others prefer to stick to investments in the field. In any case, the position of digital money in the sector makes it one of the most desirable financial technology trends in 2023 and further on.
Digital banks are emerging
With paperwork decreasing and technology substituting numerous of the previously required physical actions, it’s only right that new possibilities are being introduced. Fully digital cards are nothing new to the sector, but now it’s virtual banks that are getting people attention. This trend is not likely to dominate the field any time soon, yet it provides a good alternative to the conventional banks.
The biggest advantages of these banks include:
- The possibility of arranging everything required online. You don’t need to worry about the opening times, you can do anything you need, any time you want, from anywhere in the world.
- Since all the information is purely online, this eliminates the possibility of the physical card theft.
- With the two points mentioned above, the time and money savings are quite obvious.
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The FinTech trends are driving the industry
The incredible connection of the financial field with powerful technological solutions is definitely improving the state of businesses. All the changes are aimed to provide more security, and usability to products. Such a provision gives an opportunity for customers to worry less and use the services effortlessly. This also stimulates the growth of the field itself and opens new possibilities for everyone.
The room for improvement and further development makes the mentioned points the FinTech trends to watch in future. Some of them have already shown great results, while others are still forming. Whatever the case, all of them are here to stay. The predictions made about the future of FinTech are quite positive and ensuring. Technologies like Blockchain and AI are on top of their game with what seems to be close endless possibilities. And what can make us happier than knowing our financial future is protected? If you have any questions, we are here to help!
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