The 6 most important fintech and online banking trends in 2022

In 2022, we can expect more growth in this industry as more people switch to digital banking services. In this post, we’ll look at some of the most exciting FinTech and online banking trends in 2022 and what they mean for business owners and entrepreneurs.

What we saw in 2021

The first two years of the pandemic saw large businesses collapse and small startups skyrocket. Those who made it were those who were quick to recognize and adapt to the new trends imposed by lockdown measures and fears of the coronavirus. For example, start of food delivery appeared everywhere, and some large companies also branched into this market, amassing a huge customer base in the process.

In the economic area, 2021 was a groundbreaking year for financial technology sector. We saw the rise of embedded financial services, super apps and the massive expansion of online banks, such as Monzo, Revolut, Wise and HelloBank, among many others. In the cryptocurrency scene, there are many major crypto exchanges also became even larger, and several new ones appeared in different places.

We also saw an increase in the use of artificial intelligence across the finance and banking industry, with innovations ranging from robo-advisors helping ordinary people make better investment decisions to AI-powered chatbots that streamline verification of the customer’s identity and provide a more personal banking experience.

However, the hottest trend we saw in 2021 was the use of BNPL or buy-now-pay-later across many online retail giants such as Amazon – whose revenue is expected to grow by a exceptional rate of 26.35% per annum—eBay and Alibaba using platforms like Zip (formerly quadpay).

What to expect in 2022

The first half of 2022 saw the continued trends of 2021, and in the 2nd half we can expect these trends to continue and grow further. This includes the continued rise of online banking, the expansion of embedded financial services and more. It will also likely be one of the best years for blockchain technology across the board.

Let’s look at each of the key trends to watch for in H2, 2022.

#1 More payment flexibility through Buy-Now-Pay-Later or BNPL

BNPL is fast becoming one of the most popular payment methods available and we can expect even more businesses to adopt it in H2 2022. This is because it offers customers a more flexible way to pay for their purchases , which was something of a lifeline during the first two years of the pandemic, but is now becoming the norm.

Even traditional financial institutions are getting in on the action, with banks such as JP Morgan Chase and Goldman Sachs offering their own BNPL products. This trend is here to stay and will only grow in H2, so if you’re a business owner, it’s something you need to be prepared for.

With BNPL, customers can split their payments into smaller installments over time instead of paying for the purchase all at once. This makes it more affordable for people to make large purchases and less likely to default on their payments.

BNPL is convenient for customers, but it is also good for business owners as it can lead to increased sales and higher customer retention rates.

If you don’t already offer BNPL as a payment option, consider doing so. It is estimated that by 2026, approximately 25% of all online retail sales will be paid to use some sort of BNPL service, and most of these purchases will come from Millennials or Gen-Zs.

#2 Decentralized crowdfunding will continue to help businesses grow

Decentralized crowdfunding is a type of financing that allows entrepreneurs to raise money for their business projects from many people, or backers, using a blockchain-based platform. It is a more democratic way of financing projects, as it does not depend on the support of a few wealthy investors.

This type of crowdfunding has grown in popularity in recent years, and we can expect to see even more companies turning to it in H2 2022. This is because it offers several advantages over traditional fundraising methods, such as venture capital or loans.

Some of the benefits of decentralized crowdfunding include:

• It is open to anyone with an internet connection, meaning businesses can reach a global audience of potential supporters.
• Using smart contracts means that the financing terms are transparent and fair.
• Decentralized platforms are often more efficient and faster than traditional fundraising methods.

By 2021, the global crowdfunding market increased to over $13 billion. This value is projected to double by 2027, which signals increased investor confidence and start-up participation. Some of the biggest traditional crowdfunding platforms are migrating to decentralized crowdfunding, and many more blockchain-native platforms keeps popping up.

One of the world’s largest crowdfunding platforms, Kickstarter, is already studying how to move the entire platform to a blockchain-based protocol to make the entire support and reward process more transparent and reliable. In fact, the migration takes trust out of the equation through decentralization and the use of smart contracts.

If you are launching a startup in the second half of 2022 and are thinking of ways to fund your project quickly and safely and without losing equity, decentralized crowdfunding is an excellent choice to consider.

#3 More banks will offer embedded financial services

Embedded financial services are any type of financial product offered by a non-financial institution such as a retail company, an online platform or simply a technology provider instead of a bank or other traditional financial institution. These services include personal and business credit cardloan, payment processing and insurance. The top trend mentioned at the beginning of this list, BNPL services, is actually a type of embedded financial service.

Most of us have already used embedded finance. Those who don’t think they probably haven’t realized it simply because these services are integrated seamlessly into various platforms we all use every day. Some examples of embedded finance include:

• Buy Now Pay Later (BNPL) services offered by retail companies such as Afterpay, Affirm and Zip.
• Payments in the app are processed by companies such as Apple, Google or Amazon.
• Micro insurance products offered by HealthTech firms such as HD, a D2C marketplace for healthcare services.

Many companies use these services to allow ten-year-olds to make in-game purchases on their favorite gaming appswhich represents a internet risks for children and the parents’ finances, but an opportunity for online businesses. The trend of offering financial services from non-financial institutions started a few years ago, but it has accelerated in the last year or two and is expected to grow even more in 2022. The trend is driven by traditional banks losing their monopoly on financial services and be forced to compete with the likes of large technology firms, retail companies and other non-traditional players.

#4 Increase in banking in underdeveloped countries

In the past year, there has been a significant increase in the number of people using mobile banking apps and other digital banking services in developing countries. This trend is expected to continue in 2022 as more and more people in these countries gain access to smartphones and the internet.

Underbanking has been a major problem in many African and South American developing countries, as traditional banks have been unwilling or unable to serve the majority of the population. This has led to a situation where only a small minority of people have access to formal banking services, while the majority are forced to rely on informal methods such as moneylenders and peer-to-peer lending platforms.

Online banking platforms have emerged as a promising option for small business owners, entrepreneurs and ordinary people to manage their money more efficiently and cost-effectively, so we expect this trend to continue in the coming year.

#5 Decentralized finance and blockchain solutions are on the rise

The past year has seen a significant increase in the number of financial institutions and startups exploring blockchain technology and decentralized finance (DeFi) solutions. DeFi is a new way of offering financial services on blockchains like Ethereum. Using smart contracts, DeFi platforms can offer a wide range of trustless, transparent and often automated financial products and services. In addition, they are more secure because they do not rely on centralized infrastructure that can be hacked or manipulated.

The DeFi industry’s market cap fell by 9% in early 2022, but quickly recovered and has been growing ever since. Most analysts predict that 2022 will surpass the total value locked in smart contracts in 2021, which peaked at approximately $250 billion.

As mentioned earlier, decentralized crowdfunding is one of the main trends this year, but it is not the only way blockchain is affecting finance. This trend is expected to continue in 2022 as more and more companies explore the potential of DeFi to disrupt traditional finance.

#6 The banking industry is going green

Last but not least, an important and encouraging trend to watch out for this 2022 is that more and more banks and financial institutions (both online only and brick and mortar) are commits to tackling climate change and embrace sustainable business models. Currently, many large companies such as Deutsche Bank, HSBC and Bank of America have pledged to reach zero emissions before 2050.

With both businesses and local governments embracing sustainability in their supply chain management, this is an important trend for business owners to watch out for. Part of the sustainability commitments signed by some of these organizations, which include banks and other financial institutions, involves not doing business with unsustainable companies, potentially limiting access to financing and other financial services.

The bottom line

The six trends we’ve outlined are just some of the most important to watch for in 2022. As a business owner or entrepreneur, it’s important to keep up to date with these trends to make the most of the opportunities they present. They provide an interesting snapshot of the current state of online banking and financial technology, and we can expect to see even more exciting developments in the coming year.