Welcome to the highly anticipated second part of our comprehensive Fintech Trends 2023 blog series. In this blog, we will delve deeper into 5 pivotal trends that are reshaping the financial landscape. Our exploration begins with the transformative impact of open banking, where collaboration between financial institutions and fintech companies paves the way for innovation and enhanced customer experiences. We will examine the growing prominence of Software-as-a-service (Saas) solutions, blockchain technology's role in revolutionizing trust and transparency, and the exponential growth of cross-border e-commerce. Prepare to gain valuable insights into these cutting edge-trends that are shaping the future of finance. Stay tuned for more thought provoking revelations in our blog.
After years of debating open versus proprietary platforms, it's clear that open platforms have proven their worth by enabling the extension of SaaS platforms. This is particularly evident in the financial services industry, where SaaS has gained remarkable long-term viability and scalability, Fintech companies now offer the majority of features found in expensive legacy systems of banks, but at a fraction of the cost.
Through the utilization of open APIs, banks can collaborate with their FinTech partners, who can provide innovative products and processes at a relatively low cost. SaaS-based models have thrived in the financial service industry, thanks to increased API usage and regulatory efforts like PSD2, which promote the creation and promotion of open platforms. The advent of API-based software as a service has expanded the market, empowered developers, and revolutionized traditional sectors. As a result, significant value has been derived from data and creative system integrations, which can now be shared across a broader and more powerful ecosystem.
This approach is ideal for direct collaboration with banks, development communities, incubators, and data providers within the ever-growing FinTech ecosystem. Business users with technical expertise can effortlessly launch commercially viable products using a customer experience layer wrapped in a user-friendly interface.
According to a recent Accenture study, cross-border payment flows are projected to reach a staggering $156 trillion by 2022.
Following the explosive growth of e-commerce during the pandemic, international transactions now present significant growth opportunities for small and midsize businesses that previously focused only on local markets. However, it's important to note that these consumers expect convenient and straightforward payment options, regardless of their geographical location.
Payout settlement solutions are already in high demand, providing businesses with a competitive edge while reducing the risk of payment failures. As we move into 2023, real-time payment capabilities are likely to gain even more popularity as this trend continues to flourish domestically.
2023 has the potential to be a milestone year for blockchain technology, as it has become more accessible and secure with the advent of Web 3.0. Just like cryptocurrencies, the metaverse and virtual reality are becoming increasingly integrated into everyday life. In fact, a recent study found that 76% of surveyed executives believe that digital assets will either serve as a strong alternative to or completely replace fiat currencies within the next 5–10 years.
Banks and financial institutions are now embracing blockchain technology to harness its numerous benefits. Banking professionals have acknowledged that blockchain technology will continue to influence the banking sector in 2023 and beyond. The unparalleled security offered by blockchain is particularly appealing to financial institutions, especially when it comes to identity management. Additionally, blockchains are increasingly being utilized in fraud prevention measures.
The growth of blockchain and cryptocurrencies is expected to drive demand for blockchain-as-a-service (BaaS) as companies seek innovative ways to digitize and streamline their business operations.
In 2023, get ready to take the popular saying "there's an app for that" to the next level. Enter the era of "super apps," which offer comprehensive suites of services and products from a single platform. These services encompass transportation (think Lyft), retail (like Amazon), food deliveries (such as DoorDash), banking, entertainment, and more. With these incredible apps, customers can not only make purchases but also schedule appointments, make reservations, and even send packages to any desired location. Super apps like WeChat and Alipay have already dominated the Asian market, and I predict that the trend will catch on in western countries in 2023 as a few US-based fintech companies start offering a wide array of services to consumers through a single app. PayPal, for instance, is a prominent American platform that aspires to become a market leader in the realm of super apps. In fact, the company's CEO has openly expressed PayPal's ambitions to develop a super app that creates a "connected ecosystem where you can optimize and control data and information between apps."
The advancements in technology, along with the increasing adoption of open platforms and APIs, have revolutionized the financial services industry. Fintech companies are now able to offer innovative solutions at a fraction of the cost, empowering businesses to compete in an ever-expanding ecosystem. Moreover, the convenience and simplicity offered by real-time payment options and payout settlement solutions have become essential to meeting the expectations of today’s consumers. Whether you’re looking to optimize your business processes, enhance customer engagement, or explore new avenues of growth, staying ahead of the curve is crucial. If you’re interested in leveraging these cutting-edge solutions, our team is here to guide and support you every step of the way.
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