What will define Fintech trends in 2023?
The Fintech (financial technology) sector exploded last year with a record high level of investment. This year it has continued to boom, albeit in a different environment.
So, what’s next for fintech in 2023?
Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, comments: “It was a historic level of investment – around $130 billion in fintech by 2021.
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“But this year, against a backdrop of slowing economic growth around the world, supply chain issues, red-hot inflation and the subsequent rate hikes, the environment has been more challenging.
“But fintech continues to reshape and redefine how financial services are delivered across the board, with interest from consumers and potential investors at all-time highs.”
Fintech predictions for 2023
Here are Nigel Green’s top fintech predictions for the coming year.
First, traditional banks will increasingly be forced into the space.
“They have been in a perpetual game of ‘catch-up’ for the past few years amid changing customer expectations, regulatory requirements and technological advances, and this is only expected to accelerate. Why? Two reasons: First, millennials, as they are the fastest growing group of clients; and secondly, because they will be the recipients of the largest transfer of wealth in history, he says.
According to some estimates, $68 billion in wealth will be transferred from baby boomers – the richest generation ever – to their children and other heirs (millennials) over the next few decades.
The DeVere CEO continues: “Millennials have grown up on technology. They are “digital natives”. They have been influenced by the huge wave in technology as they entered adulthood – which came around the same time as the global financial crash that hit in 2008. Against this backdrop, they apparently became comfortable using fintech to help them access , manage and spend their money instead of using a traditional bank.”
In fact, according to a Facebook white paper titled “Millennials + Money: The Unfiltered Journey,” 92% of millennials distrust banks, and many see them as an unreliable source of information.
Mobile-first millennials, it seems, expect easy, instant access and control of their finances in the palm of their hand. They demand to be able to transfer money and pay bills with a tap or swipe. They want to be able to review their spending habits, be offered guidance and have real-time access.
“Finally the banks are aware of this.”
Secondly, there will be greater regulatory control.
Nigel Green observes: “This will happen as fintech services are increasingly embedded in unregulated entities. As such, watchdogs around the world will seek to further protect customers by increasing regulation, with a particular focus on accountability and transparency.”
Third, data will become increasingly important.
“There will be increasing emphasis on exploring new methods of collecting, analyzing and using it to differentiate companies’ customer-based propositions.”
And fourth, Asia will continue to be at the heart of the fintech revolution.
– We attribute this to several key factors. These include a proactive approach to innovation by regulators; the abundance of virtual banks; the evolution of the broader technology ecosystem, particularly application programming interfaces (APIs); and the influx of Chinese financial and technology giants into the sector.”
Even though the world is “tipping on the edge” of a global recession, “we expect fintech investment to continue to build momentum in 2023 as it improves the customer experience and is increasingly in demand. It also helps companies increase efficiency, increase productivity, lower operating costs and improve competitive advantage, concludes deVere Group CEO.
About deVere Group
The deVere Group is one of the world’s largest independent advisers for specialist global financial solutions to international, local, affluent and affluent clients. It has a network of more than 70 offices worldwide, over 80,000 clients and $12 billion under advisement.
