According to Market Data Forecast, the fintech startup market grew from an estimated $105.41 billion in 2021 to $131.95 billion in 2022. This data provider also predicts a superlative annual growth rate of about 12% by 2026. Obviously, these astounding numbers didn’t appear overnight.
2022 was a challenging and, at the same time, eventful year, which remarkably empowered the digital and financial experiences of everyone who owns a banking app. And as it is over, we can’t miss the perfect opportunity to reflect on what it brought to the financial world, how it redefined our banking preferences and trends, and how all that paved the way for what is about to happen in the coming year.
Let’s reminisce about all the essential highlights of 2022 and take a sneak peek into the future of FinTech. Have a read!
Top Fintech moments from 2022
First, we’ll start with the last year’s most noteworthy highlights and compelling news we observed. Then, we’ll discuss what 2023 holds in store for the financial sector.
The cryptocurrency was very promising and was expected to revolutionise payments and finance. Blockchain’s unprecedented security and innovation hooked a growing number of banks and investors. But having invested in these digital assets, many realised only in June what a wrong decision it was. The prices of Bitcoin, Ethereum, Solana, and Cardano have plummeted. In addition, the crypto lender Celsius collapsed and filed for bankruptcy, thus leaving a blank spot in the worldwide investors’ portfolios.
Also, Web3 has seen a steady progression this year. After the crypto collapse, consumers were more interested in digital goods that they could have more ownership over. According to Leon Foong, Head of APAC, Binance, “To build a robust Web3 infrastructure, security is very important, and Binance plans to continue with initiatives such as Global Law Enforcement Training Program, disclosing Binance’s hot and cold wallet addresses through Proof of Reserves, and establishing the Industry Recovery Initiative (IRI) to protect consumers and rebuild the industry.” In the meantime, the metaverse became a hot trend too, with everyone from Facebook to Microsoft developing the ideas of how to build the internet of the “next level.”
Overall, it was challenging, on the one hand, but many sectors witnessed improvements.
Fintech predictions to watch in 2023
Artificial intelligence and machine learning will continue to soar
2023 will be the year when artificial intelligence technology will take centre stage. The increased adoption of artificial intelligence in the financial sector is broadly due to its value-added benefits, including better customer personalisation, increased efficiency, operational performance, risk and fraud detection, data exploitation, and enhanced customer relationship management. Many businesses resort to AI solutions because it helps them handle the biggest bottlenecks. For instance, a lack of qualified talent, data gathering, and management, or an insufficiency of budget.
The Artificial Intelligence Index Report, prepared by the Institute for Human-Centered AI of Stanford University, highlights the substantial increase in spending on AI and forecasts a further 20% by 2025. So, for businesses as well as financial players, exploiting AI and machine learning is a great trend to jump on this year.
The competition will be even more fierce
The research taken from the FinTech Global database suggests a sharp decline of 31% in European Fintech deals compared to 119 deals in total for Q4 2022. This trend is very likely to remain in 2023 as the Euro area augmented their interest rates to 2.5% in December 2022.
As a result, FinTech funding is much harder to get from year to year. 2023 is no exception. Not to mention the current society that requires 24/7 services with customers bringing in new needs daily. One of the ways to beat the competition for capital and clients is to improve the quality and originality of your product and equip it with add-ons.
Need help figuring out how to do it? A multitude of third-party suppliers and enablers, such as Crassula, offer seamless and quick integration of the most trending Fintech solutions in your company’s app and platform.
Crassula Banking-as-a-Service software is designed for banks, EMIs, APIs, MSBs, and other financial institutions to meet all requirements set by the competition. It will be ideal for those searching for a personalised ready-to-launch solution with both web and mobile interfaces, administrative panels, APIs, and much more.
API technology will be booming
Speaking of API-based financial services, this technology is exploding among developers, as it is an essential part of software development for web, mobile, and AI applications. Thanks to it, customers can link their financial accounts on all devices and enjoy the banking experience.
“This year’s report reaffirms that the market has shifted to where businesses focused on digital transformation now need to be an API business in order to thrive,” said Iddo Gino, CEO, and founder, Rapid. The robust API system is a revolutionary and indispensable tool for achieving
financial freedom. The annual State of APIs Report accentuated the wide adoption of APIs and trust in its efficiency. 69.2% of developers claimed that in 2023 they would strongly rely on APIs even more than in previous years. So, it is obvious that many businesses will prioritise API-fueled solutions.
Crassula is a bright example of successful API usage. It helps them facilitate integrations with different service providers and automates workflows. So, if you are still hesitating about whether you need to focus on APIs as part of your digital strategy for 2023, the answer is a definite yes.
Conclusion
Regardless of the tremendous changes in the Fintech climate, the industry keeps evolving and growing. Some trends are getting consolidated, and some new ones are being introduced, but one thing remains certain. There is still huge potential and numerous opportunities for businesses.
Therefore, it is important to keep our finger on the pulse of the main driving forces and events on the horizon. We hope this year will prove to be productive and rewarding. Now, you are aware of the most popular trends and are all set to make 2023 your year.
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