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Technology has changed the way we live. 

From being able to communicate with people on the other side of the world to building an investment portfolio using our cell phones, we have witnessed a technological revolution.

Fintech aims to change the world of financial services, using cutting-edge technology and innovative thinking.

Our blog will share some valuable insights about fintech and the fintech trends that could shape the financial world in 2023.

Table of Contents

What is Fintech?

If you wonder what fintech stands for, the answer is financial technology. Fintech refers to companies that use new and advanced technology to change the way they deliver financial services and serve their clients.

In the past, those working in the conventional financial industry saw fintech as just a rebranding of the same old things. In reality, fintech could raise traditional banking and financial sector performance standards by providing customer-centric services and updating financial product and service designs. It also fosters greater financial inclusion by improving client access to financial goods and services.

Fintech Trends to Watch in 2023

Our financial life has changed rapidly in the last decade. Internet access isn’t as hard to get as it was some years ago, and mobile devices such as cell phones and laptops allow us to monitor our finances and build plans without the compromises of the past. Fintech can change the financial world even more. These are some of the fintech trends to look for in 2023.

Open Banking: The Future is Here 

Some people may wonder what exactly open banking means. Interacting with banks and other financial services providers can become quite complicated sometimes as you need to have access to various applications. Open banking can solve the problem for everyone involved as banks and third-party firms can communicate via the use of APIs.

Ernst & Young (EY) experts noted in the latest Open Banking Report that open banking leads to open data, benefiting consumers, businesses, and financial institutions and becoming embedded into our daily lives with purpose.

Artificial Intelligence Takes Over

Artificial intelligence (AI) is another piece of technology that has been on the rise in recent years, and it is expected to continue to grow in popularity in 2023. AI can be used in a variety of ways within fintech, such as fraud detection, customer service, and investment analysis. With the increased use of AI, we can expect to see more personalized services and improved fraud prevention.

While many companies have rolled out various AI tools, ChatGPT managed to attract 100 million users in January 2023, just two months after its launch. A UBS report noted that ChatGPT is the fastest-growing consumer application in history. Many AI tools though have been released in the last few months that could make a difference in various sections of the industry.

Digital Currencies: Will They Regain Ground in 2023?

Bitcoin and Ethereum are the two most popular digital currencies in the world. Digital currencies drew investors’ attention some years ago as they were the first examples of what decentralised technology could achieve. Ever since then, many businesses and individuals use cryptos for various types of payments. Market analysts suggest that the trend will likely continue into 2023 with digital currencies gaining ground against fiat currencies.

Crypto prices hitting multi-month lows such as Bitcoin trading below the $20,000 threshold in mid-March 2023. Market analysts suggest that rising interest rates hurt cryptocurrencies’ values, with investors adopting a cautious approach in the last few months.

Bank of America analysts told Forbes reporters that “our strategists remain cautious on growth as robust economic data delayed the timing of a recession, but also indicates the potential for reflation and additional rate hikes. Given that January’s risk asset rally was partially driven by short covering and mean reversion, the likely higher-for-longer rate environment may result in pressure for growth and, therefore, digital assets.”

Mobile Payments to Spike in the Next Years

Mobile payments are not something new. However, improved technology used in mobile devices such as NFC for example and advanced software applications, make experts believe that the number of mobile payments could increase significantly in 2023. As people tend to use their mobile devices for many daily tasks, some analysts suggest that the preferred payment method could also change. They note that biometric authentication is a real game changer when it comes to mobile payments.

A report by the Business Research Company published in February 2023 suggested that “the global digital payments market will grow from $96.19 billion in 2022 to $111.11 billion in 2023 at a compound annual growth rate (CAGR) of 15.5%. The digital payments market is expected to grow to $197.87 billion in 2027 at a CAGR of 15.5%. Asia Pacific was the largest region in the digital payments market in 2022. Western Europe was the second largest region in the digital payments market.”

Regtech Could Change Regulatory Frameworks

Regtech refers to the use of technology to assist financial firms in meeting regulatory obligations. Regtech is growing increasingly significant as the number of laws in the financial industry grows. More financial institutions will use regtech solutions to help them comply with rules more quickly and effectively in 2023.

The concept of leveraging AI to help prepare oneself against the problems of financial crime is gaining traction. Machine learning models for consumer due diligence, transaction monitoring to prevent false positives, transaction behaviour automation, network analysis, and fully automated processes for performing investigations are just some examples indicating what we can expect in the future.

Digital Identity Protects Your Data

How many times have you received a phishing email asking you for your login details? Stealing such vital data was relatively easy until recently. New technologies have emerged to boost anti-fraud defences. 

The banking sector might benefit from this since it could aid in the fight against fraud and identity theft. Tech experts suggest that in 2023 more banks will ramp up using digital identification systems to better safeguard their clients' personal information.

Voice Technology at Your Service

Who would have thought some years ago that you could learn your bank account balance just by speaking to an automated system on the phone? Alexa by Amazon and Google’s Assistant are just some examples of voice technology used in the finance industry.

Customers can use voice commands and interact with an automated voice tech system for a variety of tasks, including checking accounts and paying bills. Voice technology is expected to enable more banks to offer faster and more efficient services to their clients in 2023.

Blockchain Remains a Fintech Pillar 

Blockchain technology, which underpins cryptocurrencies, has various financial applications. It can safeguard and track asset ownership and payment systems. In 2023, more financial organisations will test blockchain technology to improve services.

Fintech Trends 2023: How Is It Shaping the Financial Industry?

In conclusion, the fintech industry is poised for another year of rapid growth and innovation in 2023. As more consumers and businesses adopt digital solutions for their financial needs, the industry will continue to evolve and transform. From digital currencies to open banking and artificial intelligence, the emerging fintech trends of 2023 are set to reshape the way we think about money and finance. 

How to Invest in Fintech

You might be interested in learning how to start investing in the fintech industry now that you have some background knowledge about it.  In order to have access to the financial markets, the first thing you need to do is select a brokerage.  

At Admirals, we offer the ability to invest in over 4,500 stocks and more than 200 Exchange-Traded Funds (ETFs).  

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.