FinTech is always bursting with ideas. New trends come and go, applications rise and fall. What’s constant is the consumer’s need to find a tool assisting with everyday life challenges and occasions. FinTech trends in 2022 are special because they sum up an era of product development while pointing towards what’s to come. The market landscape will look like nothing before. Are you ready for it?
Current trends in FinTech highlight what we have been saying for a while now – the customer is everything. The center of every business process and product interaction. Offer, user experience, and in-app feedback are what people want the most. Plus, a few other things that 2022 FinTech trends show very clearly.
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FinTech trends in 2022 you need to think about
According to the Martech Alliance’s report, the most customer-centric industries out there are healthcare, travel, and retail. There’s no FinTech among them, which is interesting. Personal finance and the ability to manage money are crucial for everyone. It doesn’t get more personal than that. Customer-centricity is and will be in the future one of the key issues to address while developing any kind of digital product.
What are the FinTech trends to watch in 2022 and how will they shape the market?
1. Blockchain technology is on the rise. In addition to being the absolute buzzword in recent years, blockchain is actually useful. It’s safe, fast, and secure. It removes third-party involvement and external processing. The technology is useful for startups and big companies alike. By providing a digital ledger, it gives users more flexibility and operational freedom.
We observe a strong trend towards the blockchain. Revolutionizing know-your-customer (KYC) processes is the obvious implementation here, but not the only one. Companies can use it for borderless payments as well. Typically, banks charge 10% to 15% for transferring money (the so-called remittance fee). With blockchain, the amount drops to even 3%.
2. Artificial intelligence (AI) and adaptive machine learning (ML) are the name of the game. Companies need data. To know more and offer personalized products and promotions. If something seems to work for everyone, it’s usually good for nothing.
Companies use artificial intelligence in many different ways. To analyze customer’s behavior, assess risk and prevent dangerous situations, decrease risk from loan defaults, improve business operations, and more. This trend will continue to grow. Especially since cloud solutions are relatively cheap and provide additional bonuses that support analytics.
3. Cloud banking is growing. And since we’re talking about that… Cloud is a powerful tool for anyone who knows how to utilize its value. For example, it provides data analytics capabilities that further accelerate growth. It also serves as a convenient way to save money on server infrastructure and maintenance.
Cloud banking is one of the biggest 2022 FinTech trends and certainly one of the most important FinTech industry trends since the conception of this form of business. It represents another major shift in the maturity of the industry. Gartner predicts that cloud-native platforms will be a foundation for more than 95% of new digital products. Let’s compare that with less than 40% in 2021 and you have the answer for why it’s good to have a cloud on your side. Amazon Web Services, for example.
4. Contactless payments take over. The trend is nothing new, we have reported on it at the dusk of 2020 (see more here: Most Popular Online Payment Methods). COVID-19 gave it a boost but the fact is that people traded their plastic cards for even more convenience even before that.
A study by VISA from that year shows that one-third of small businesses accept only contactless payments, with 78% of the consumer base changing their habits as well. That’s a major shift. FinTech trends in 2022 wouldn’t be complete without this statement – the world is going with smartphones and smartwatches for payments.
5. Open banking’s long-term sail. The adventure has only just begun. At least in Europe, open banking was born on the foundation of the Revised Payment Services Directive (PSD2). Since then, this area of the industry has been one of the strongest trends to follow.
We see three major sub-trends in this area. Generating users’ trust, mostly through the delivery of strong security measures, using API to create new customer experiences and build or extend third-party partnerships. These are examples of how open banking generates market buzz. Companies scramble to offer real, additional value for their customers. By joining forces with other players, they can easily extend their services and customer base.
6. Even closer cooperation with the e-commerce sector. Omnichannel, a strategy that forces companies to sell their products in retail stores and online, generates additional revenue streams. Also, the need for payment innovations and system integrations. Mobile wallets, ID verification technologies, and other forms of digital payments are needed to drive further growth of digital stores.
FinTech has a leading role to play here. Executives will go a long mile to secure cooperation with leading and local stores since the market is fragmented enough to accommodate players from different alleys.
7. Gamification turns users into money experts. Sort of. Gamification is a process of mobilizing people to do certain things through mechanisms known from games, including video games. Companies like Kaizo or Spindy increase customer loyalty by throwing at them challenges and special tasks that are handy in their everyday pursuit for a better account balance.
Spindy, for example, developed an algorithm that rewards “players” also known as users for balancing actions. Users win up to 100% cashback while keeping to a threshold.
FinTech trends to watch in 2022 are mostly an extension of the existing processes and mindsets. They tackle today’s challenges with tomorrow’s technologies, making room for innovations, smooth business processes, and like-minded users that want to benefit from tomorrow’s solutions today.