Trends likely to shape the Fintech industry in 2023

Despite the challenges of the initial pandemic, the fintech sector has bounced back and is growing at an unprecedented rate. An important reason for this growth is that it has overcome the challenges that characterized the traditional banking systems, thanks to technology integration and customer-centric policies. Information and financial assistance, including loan procurement, is easier and fairer, due to the existence of Fintech companies. There have also been several trends that have emerged in recent times within Fintech. As we prepare for the new year, here are some of the trends likely to be seen in the sector in 2023 due to technological innovations and upgradation efforts by entrepreneurs in the industry.

Wider use of AI and ML

Today’s economy is undeniably data-driven. Any industry that wants to survive and grow in today’s landscape and competition must make effective use of Data Science, AI and ML. The fintech industry has managed this. They use data related to online transactions, exam results and metadata about the earning potential of students enrolled in various courses in the loan guarantee process.

This reduces the chances of errors and creates a system where even those who are not familiar with the technical details of finance can avail services without any problems. As a result of this revolutionary implementation, loan penetration has increased and the Fintech sector has emerged as the torch bearer of equitable development.

Digital banking

The fintech sector has been advocating digital banking since its inception. However, the pandemic provided the much-needed catalyst for change, and now almost every aspect of banking is done online. 2023 will see minimal transaction fees, easy P2P transfers, negligible paper visits to banks, while queuing will be a thing of the past. In addition, the risk of lost documents and errors due to human negligence is minimized as everything will be done with AI and Ml.

Neo banking services

Neo banking is the next step in the growth path for digital marketing. These are online banks without physical branches. They usually operate independently or in collaboration with traditional banks. Estimates suggest that the global start-up banking market will grow at a CAGR between 2019 and 2026, generating a revenue of approximately $394 billion in 2026. This is likely to be highly beneficial for micro, small and medium enterprises.

Block chain

Blockchain technology uses data that is usually stored in categories or blocks, which are linked together via cryptography. This decentralizes a system that has traditionally suffered from the disadvantages of centralization of power and lack of transparency. Integrating this technology, or Decentralized Finance (DeFi), into the banking system will make transactions easier, faster and more secure.

The bottom line

The fintech industry in India is revolutionizing the traditional banking sector. It has introduced reforms that have changed the face of lending systems in the country through processes such as AI & ML integration, neo-banking, digital banking and blockchain technology. This sector is likely to promote the development in technology and customers can now avail all services without any hindrance of geographical location, economic status and financial literacy. Growth is thus more distributed and fair.

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