Three fintech trends to watch for in 2023 –
Steve Naudé, head of Wise Platform
For 10 years, fintech has played a major role in reviving the financial sector by injecting new competition into a saturated market. The innovation made possible by fintechs has driven rapid progress across the entire sector, as financial services organizations of all shapes and sizes strive to better meet the needs of an evolving customer base. In 2023, fintech will continue to lead industrial innovation. Here are three key trends to look out for this year:
Built-in economy and re-bundling
Embedded economics and re-bundling represent one of the biggest opportunities for innovation across the industry. From instant payments to cross-border transactions, embedded finance is highly flexible and can be leveraged by any company to create additional value for customers.
By offering customers best-in-class products within their own ecosystem, banks and SMEs reduce the risk that their customers will look for better products elsewhere, allowing them to retain and grow their customer base. Embedded finance also means that banks and companies can get additional functions while keeping their focus well trained on the core product offering.
For example, Wise Platform is a built-in finance solution that allows partners to integrate the best way to send, receive and manage money into their existing infrastructure. This allows banks and businesses to seamlessly bring fast, cheap, transparent and convenient cross-border payments to customers at a relatively low cost compared to building, maintaining and improving services in-house.
Combining ease, convenience and cost-effectiveness, embedded finance will be a key area of focus across the sector in the coming year.
Embedded finance means that banks and companies can get additional functions while keeping their focus well trained on the core product offering.
Immediate payments
Instant payments continue to be a major focus for all financial services companies. Wise was the first technology company to connect to the Faster Payments system back in 2018, and every year customers’ money moves faster thanks to continuous innovation.
Today, over 50% of Wise’s transactions land immediately, i.e. in less than 20 seconds. This means that private and business customers have the peace of mind that their money is quickly available and has landed in the right place.
Instant payments are about more than saving time; they improve transparency, increase liquidity and make sending money either domestically or internationally more convenient for customers and businesses worldwide.
While many banks and fintechs have already invested heavily to move towards better instant payments, there is much more to do. Sending money abroad via Swift can still take several days, and as more alternative providers emerge and customer demand continues to grow, instant real-time payments will continue to be a priority in 2023.
Speaking of transparency
Transparency is another trend that will become increasingly important in 2023 and beyond. Customers are more attuned to hidden fees and high prices across the board – but especially when it comes to cross-border payments.
This increased awareness is partly due to providers such as Wise and Revolut, which offer customers a far cheaper alternative to their traditional banks. Pressure is also increasing from national authorities and international bodies such as the UN. In the US, Senator Elizabeth Warren has called on banks to drop “junk fees”, while UN SDG target 10c aims to reduce the average cost of money transfers to less than 3% by 2030.
Customers are more attuned to hidden fees and high prices across the board – but especially when it comes to cross-border payments
Wise has been a driving force in this space, not only developing a market-leading FX payments product, but also pushing for top-down industry-wide changes that will benefit consumers regardless of their provider of choice. Wise Platform is an important part of this effort – by working with banks to integrate our product, we automatically introduce a transparent product, benefiting customers while taking the banks and business revenue goals seriously.
Customers do not like to be misled; especially given the economic situation we have with us into 2023, players who take transparency seriously are more likely to retain and grow their customer base and stay on top of any impending regulatory guidelines.
Despite the financial difficulties the industry has faced over the past year, it has never been a more exciting time in the world of fintech. The potential for industry-wide change that benefits customers around the world is enormous – especially as collaboration between industry players grows year on year.
Wise Platform works with over 60 partners worldwide – from established banks to credit unions to investment platforms and payroll providers – to provide their customers with fast, cheap and transparent international payments from the convenience of their existing app. Introducing this service enhances their value proposition and means that fewer customers will turn to other suppliers who better serve this niche.
Whether you’re a startup, scaling up, already operating globally or dreaming of better serving an international customer base, find out how Wise Platform can transform your offering today, and kick off 2023 the smart way.
