It’s been a big year for fintech. Despite pandemic-induced delays, the industry has continued to grow at an unprecedented rate. This year, we can expect to see even more growth in fintech as the world gets used to the “new normal” way of life. From contactless payments to digital banking, fintech is redefining the way we interact with the financial world.
The financial industry has been on a trend for some time now to become more accessible and innovative with its services. This is evident in the recent rise of fintech companies that are providing alternatives such as lending or investing options outside the traditional banks’ scope but still offer many benefits associated therewith – one example being CB Insights’ report about how third quarter 2021 was an especially busy period when 147% more money went into financing than last year’s figure.
And as fintech gets more accessible and user-friendly, we can expect even more people to start using it in their everyday lives. So what can we expect from fintech moving forward? Let’s find out.
Embedded finance continues to soar
Embedded finance is an emerging trend in fintech where traditional financial transactions are integrated into other processes. For example, a customer may be able to pay for goods or services using their credit card, without having to first open a separate financial app or website. Instead, the payment is processed seamlessly in the background. This can provide a more convenient and streamlined experience for the customer, as well as help businesses boost sales and reduce costs.
Embedded finance is still in its early days, but it has the potential to revolutionise the way we handle financial transactions. Why? This is because embedded finance is already on its way to becoming mainstream this year through the buy-now-pay-later option. On Black Friday last year, PayPal facilitated around 750,000 BNPL transactions—a 400% increase from 2020. BNPL allows consumers to purchase items and spread the cost over a period of time, without accruing interest or fees. This option is particularly popular with millennials and Gen Zers, who are increasingly looking for ways to manage their finances in a flexible and convenient way. With more fintech companies offering BNPL options, it’s likely that this payment method will become even more popular in the next year.
Web3 will become more mainstream
Web3 enables consumers and corporations to take back control of their digital goods. The buzz around this new technology continues as people await its release, which will decentralize the internet by rebuilding it on blockchain tech without any financial intermediaries like banks involved in transactions between peers.
As the Web3 space continues to evolve, leaders will be delivering solutions in consumer protection and accessibility. This could instil much more confidence among consumers which would make them likely adopt it at large scale.
Blockchain technology is becoming more established and accessible in everyday life. This year will be a landmark for blockchain, with the Web3 coming closer to safety while still providing amazing opportunities that were once only available on paper or via simulations within virtual reality platforms such as Metaverse.
The future of money is here and it’s not fiat currency. The global survey by Deloitte found that 76% percent or more executives expect digital assets to serve as a strong alternative to cash in five years or less, with an outright replacement possibly coming sooner than expected!
Rising Cross-border e-Commerce
With the rise of e-commerce, cross border trade has been on an upward trajectory for quite some time now. In fact, the total cross-border payment flow worldwide is projected to grow by 5% per year and reach $156 trillion this year.
As more people turn to online shopping instead of physical stores or catalogues – there are simply fewer barriers between countries which means that international transactions can happen much easier than before thanks in large part due this development.
With the trend toward real-time payments already gaining momentum, it’s not hard to imagine that by 2022 there will be no need for businesses in this country who want their money on time and worry-free.
Financial technologies are changing the way we live our lives. As these new innovations become popular, there will likely be some growing pains that need addressing before they can take off at scale but in time this technology’s result redefines how consumers and businesses interact with finance forevermore!