In this sense, Fintech trends 2023 constitute a very varied ecosystem of providers and services. From the implementation of digital banking platforms to the growth of fast, secure, and very low-cost international payments, the Fintech sector makes it possible to streamline economic and financial operations without making a major investment.
Indeed, virtual payments, cryptocurrencies, and blockchain platforms for financing are just some of the advantages for a startup; they involve all kinds of IT solutions dedicated to asset and financial management that represent a comprehensive approach that simplifies risk management.
What are the Fintech Trends for 2023?
Cashless: We are using less and less cash
One of the first innovations in Fintech; digital cash management platforms and services. Within this category are companies that offer free online wallets and very low-cost current accounts for managing company funds and improving their ability to grow and scale.
These days, I don’t think anyone is surprised anymore when we pull out our cell phones or digital watches to pay for a product or service, especially Generation Z and Millennials.
These types of services are organized according to each particular business and allow us to monitor our financial habits in a comprehensive, simple and easy way. Likewise, these types of applications assist in decision-making by making suggestions and recommendations of opportunities to improve the performance of operations and return on capital.
Artificial intelligence and IT security
Thirdly, one of the most underrated features of this new financial paradigm is cybersecurity marked by Artificial Intelligence. Precisely because it is efficient and invisible to the average user, we forget that it is an incredibly secure way to manage capital and obtain financing.
In our case, it all starts with a categorization engine called COCO, which is capable of analyzing raw transactional data and classifying it with an effectiveness of over 90%. All through machine learning and natural language processing. After this analysis, Artificial Intelligence is able to offer numerous products and services to banks and insurance companies that improve their business figures.
Decentralized Finance (DeFi): Cryptocurrencies and blockchain
If we now consider the security based on blockchain technology, we are faced with a completely invulnerable system: the cryptography used in its code represents a qualitative leap in terms of cybersecurity. It also guarantees transactions and ensures the financial inclusion of ventures and businesses that seek to prosper without the intervention of third parties that make the service more expensive.
Consolidation of new technologies
The international expansion of digital banking, especially during the pandemic, is one of the most representative Fintech trends of recent times. In Spain, this internationalization derived in Law 7/2020 of November 13, establishes a regulatory framework for the technological-financial sector. This includes data mining, blockchain applications, smart contracts, as well as all those commercial conditions for companies that provide this type of service.
Open Banking: Banks allied with new technologies
Open banking is an initiative that allows consumers to share their financial data with authorized third parties. The use of this technology is expected to increase by 2023, which will allow fintechs to create new products and personalized services for consumers.
Faced with this reality, the most established institutions and banks allied with new technologies are looking to implement cash reserve services, yield farming and other very attractive liquidity methods in the world of cryptocurrencies.
For any business or individual, one of the most profitable trends is the ability to have financial planning based on automated rules and behavioral economics to improve savings performance. In this way, our business can use surpluses to effortlessly produce income. EVO Banco’s Smart Piggy bank and Santander’s Piggy Bank are two pioneering examples of micro-savings.
Competition among neobanks
Technologies of this type have generated a volatile market in which digitally-driven new banks compete fiercely with each other for market share. This favors the user and entrepreneur since neobanks offer all kinds of benefits and very favorable conditions to grow and scale economically.
Will neobanks learn from traditional banks or the other way around?
For now, the former are offering very useful microservices for customers, such as the enrichment of transactional data.
This is just the beginning of healthy competition between institutions, which can be summed up in improved products.
In relation to the previous section, microcredits are one of the financial instruments that best represent the profile of Fintech trends for business and entrepreneurship during 2023. This market is growing every day and offers the opportunity to acquire relatively low credits and convenient conditions that can help to enter a new market or invest in the technical capacity of the company.
Sustainable innovation: reducing the carbon footprint
One trend that guarantees the expansion of Fintechs is the mission of many of the companies in the sector to be energy neutral. Precisely for this reason, many of the new proposals are concerned with reducing their consumption of fossil fuels. This phenomenon is part of a social transformation that seeks to establish a sustainable relationship between technology and the environment.
Both companies and consumers are becoming increasingly aware of the need to care for the environment. Therefore, it is essential to adapt to new customer requests and meet their needs at an ethical and ecological level. A perfect example is the incorporation of the carbon footprint calculation offered by Fintechs such as Coinscrap Finance.
Buy now, pay later: enjoy the product and pay for it later
Buy now, pay later is a payment model that has become increasingly popular in recent years. Basically, this method allows consumers to purchase a product or service and defer payment in later installments. Instead of paying the full price at the time of purchase, a term is agreed upon to pay in installments with interest. This makes the purchase of expensive products more accessible, since it is not necessary to pay all the money at once.
Buy now, pay later is widely used in online stores and has become particularly popular among young people. Companies offering this payment method usually perform a quick assessment of the customer’s credit risk and, in some cases, may require a credit card to guarantee payment. The sectors that stand out most for using this method are high-value products, technology and apparel.
Fintech trends 2023 are notably oriented towards the satisfaction of customer needs and the development of products such as microloans, investments or cashback to meet this objective. The aim is to attract and retain users by improving their experience with the brand and thus increase profitability and the number of transactions carried out. In this sense, the proliferation of Fintechs in Spain can represent a great opportunity to obtain financing and services that allow your business to scale.