5 tech trends that will change the Fintech industry in 2023

A recent report from Bain and Co. recognized India as one of the first leaders to raise the exposure of the country’s fintech industry globally. Further, the report says that the boom in smartphone adoption in India, which is set to break 1.1 billion units by FY26, could increase the net worth of fintech services by 3.5 times in India, from $100 billion to $350 billion in four year. Experts believe digital transformation played a significant role in improving customer experiences, strengthening value propositions, increasing earnings and expanding product offerings to more applications.

GenZ enters financial literacy

In a recent trend, Gen Z users are heavily influenced by e-commerce and online shopping, with frequent use of the “buy-now-pay-later” (BNPL) option, and therefore the market expects integration across sales and services. According to the Global Payments Report by Worldpay from FIS, BNPL will account for 9 percent of the country’s overall e-commerce market share by 2024, making it the fastest growing online e-commerce payment method in India. So much so that many companies have adjusted their business models to suit this new trend and are developing strategies to meet the demand for BNPL among young consumers.

Considering Gen Z and the impact of social platforms, there is a need to create transparency, customer experience and a predictive approach that can drive the new age of banking and the financial products offered. India’s young workforce appreciates the individualized financial solutions that neobanks have to offer, which is what makes this industry so alluring. An interesting survey of C-suite executives (CXOs) finds that fintech infrastructure (for banking as a service), consumer finance and neo-banking have emerged as the top three fintech issues that business leaders are most optimistic about short and medium term.

Today, the youth are much more comfortable with digital technology as they grew up with it. They find it easier to move not only towards the web, but move directly to mobile apps. This also applies to their needs for financial services too – payments, investments, lending and much more. With that in mind, organizations now understand their requirements and build a lending infrastructure where their real-time money problems are served with solutions. These services also include a number of BNPL products like healthtech, edtech and many more which provide them affordability and upgrade options.

Trends that cause the fintech industry to grow

Fintech is therefore developing a secure and simple payment for all individuals. Here are five technology trends that will define fintech in 2023:

Use of AI and ML for decision making

A new trend in fintech is driven by artificial intelligence (AI), including banks and other financial institutions. Fintech companies can break fraudulent transactions because it can help identify patterns in fraudulent activities and prevent fraud from happening. On the one hand, AI technology can speed up processes and provide more convenience.

However, given today’s dire situation, when online fraud is on the rise, fintech sectors may end up becoming a target for cybercriminals. To prevent these fraudulent transactions, AI and ML are backed up with a guarantee model, which helps reduce the number of defaulting customers who are automatically approved.

These tools not only help new customers maintain proper scorecards, who do not have a credit history, but also create newer variables and data points, which help create increasingly complex models that improve risk prediction or automate processes. This increases the effectiveness of security measures and promotes the use of data outside the planned list of ordinary lending practices. As a result, future market trends can be predicted more quickly and more precisely.

Hyper-personalization

A step ahead in the world of personalization, the fintech sector is taking the choices, preferences and demands of potential customers to the next level. The concept of hyper-personalization works well with AI, where the customer’s data is used to drive the process.

AI helps develop patterns and draw conclusions that are then used by businesses, using consumer data such as past experiences, reviews, purchases and even clicks. In today’s world, consumers expect their fintech providers to meet their requirements and recommend products and services that are relevant, just like any other store.

This personalization is not the context of the next best product offering, but the use of data and analytics to anticipate customer requirements, and provide it to customers at the right time. This could possibly increase the trust of existing customers by expanding new customers and deepening existing ones.

Super fintech application

Applications for mobile banking today aim to cover many financial products. Now it is very clear that super apps are becoming the new trend and one-stop shop that makes these consumers’ needs fulfilled.

The trend has developed worldwide and changed the lifestyle towards digital banking and financial services. These super applications are the aggregators, which continuously develop online experiences and connect customers to the market. This built an existing digital banking and financial services ecosystem; therefore, it solves problems by offering and expanding.

Voice activated technology

Voice assistance can prevent fraud because the voice is the most natural method of communication and one of the most difficult to imitate. Artificial intelligence (AI)-enabled voice assistants can handle payments, card activations, password resets and set payment reminders for customers, freeing support staff to concentrate on more difficult customer inquiries.

The Fintech movement is rapidly gaining ground, and by 2023 it is expected to further thrive in the banking and payment sectors. The fintech industry and the developments associated with it can still have a major impact on the organisation. With these new trends, Fintech will allow transforming banking into a safer and simpler experience for consumers.