Fintech trends 2023: what to expect and what to aim for in the future?

This article was initially published by the Moqod team on MT/Sprout media. Here we publish its English version.

Every year Gartner has announced its list of the 10 top strategic technology trends that organizations need to explore next year, highlighting those that will drive significant disruption and opportunity over the next five to 10 years. We at Moqod dive into their research and added our own expertise to find out how these trends will affect the fintech area in 2023.

Digital Immune System (DIS)

DIS provides fault-tolerant operating environments that prevent total system failure and a quick return to operation after these failures; reducing the risks to 2business continuity. It’s also important for end users to have confidence in the reliability and responsiveness of transactions.

The Gartner survey on overcoming challenges to digital fulfillment found that 48% of respondents put their digital investments into improving the customer experience. The research firm also predicts that by 2025, organizations focused on digital immunity will improve end user satisfaction by 80% because of reducing downtime in their systems.

Consequently, fintech industry experts increasingly focus on strategies such as observability, automation, and extreme testing in software development.

Engineering Platforms

With the fintech market booming, financial and banking organizations are in need of branched systems. This sophisticated software and app architecture requires the end user to be provided with a suite of tools and self-service capabilities. Platform engineering also optimizes the developer experience and accelerates the delivery of digital products.

In the future, this trend will be widely used by fintech. Gartner predicts that by 2026, about 80% of software development organizations will create platform groups.

Super Apps

The Super App Shift survey, launched by PYMNTS in collaboration with PayPal, found that 3 out of 4 consumers want to use feature-rich super apps rather than individual, separately installed services. Meanwhile, about 50% of respondents say they already use separate connected devices to make online payments or receive banking services.

The high demand for mobile multifunctional apps leads to the fintech sector’s mass adoption of such apps. By 2027, Gartner predicts that over 50% of the global population will use multiple super apps daily. Accordingly, fintech developers should thoroughly think through the algorithm and architecture for faster and more reliable super apps development.

Industry Cloud Platforms

Organizations moving to the cloud can increase enterprise software agility, accelerate ROI, and enable new technologies. We are sure cloud platform usage allows technology companies to securely provide financial services and simplify access to them: money transfers, payments, investing, extensive data analysis, etc. And most importantly, it securely stores its users’ personal and payment data.

By deploying IT infrastructure into the cloud, the company achieves a product that covers the need for flexible customization. Furthermore, the ability to easily integrate additional developed services or apps into the existing system.

Artificial Intelligence (AI)

AI has long been an indispensable tool for fintech companies. With robotic process automation (RPA), reporting, financial data management, and other operations are faster and less error-prone. Because human intervention is eliminated from the chain of routine tasks, companies save money by reducing the number of employees. According to Juniper Research, RPA solutions providers’ revenue will reach $1.2 billion by 2023.

Financial institutions are also actively moving toward implementing adaptive AI, which adapts to work in a specific area. By obtaining information about past human-machine interaction experiences, it self-adapts to the conditions exhibited. Gartner predicts that by 2026, companies that use adaptive AI will have a 25% advantage over competitors using conventional earlier AI models.

Web 3.0 and Metaverse

Blockchain and Web 3.0 technologies in the future promise strong protection against unauthorized access to data, as well as a high level of security for financial infrastructures thanks to DeFi. In addition, they will target innovative technologies: digital assets (NFT), cryptocurrencies, and the metaverse. In this regard, more and more fintech companies are following the development of the “Internet of the Future” in order to offer users the most relevant services.

Metaverse is now at an early stage of development, so it is not well-suited for long-term investments. Nevertheless, the forecast is optimistic that by 2027, at least 40% of large corporations will use Web 3.0 to improve their profitability.

AI Trust, Risk, and Security Management (AI TRiSM)

AI TRiSM is designed to support the management of AI models and regulate their use as trustworthy, fair, sustainable, and confidential solutions.

AI TRiSM offers tools that simplify the interpretation of AI models and improve overall security. Gartner experts believe that by 2026, companies focused on AI transparency, trust, and security will see their models improve results by 50% in terms of adoption, business objectives, and user acceptance.

How will GDPR regulations affect fintech in 2023?

The goal of the GDPR, according to the EU Commission, is for citizens to gain control over their personal data. In turn, companies must provide a secure environment for storing personal information, as well as specifications for what purposes the data is collected.

Fintech companies supplying business software offer banks simple tools to manage data lakes. GDPR has also stimulated the search for solutions to automate the creation and processing of data registers.

According to Deloitte experts, GDPR can create a more competitive landscape in the financial services market. After all, young fintech startups work with fewer data, so implementing technical security solutions for them is less costly and more efficient. Large financial organizations with large client bases are less flexible in this respect, making the implementation period of innovative developments longer and the cost significantly higher.

The fintech industry’s rapid development has brought new players to the market who are actively applying innovative technologies. Therefore, it is important for existing organizations to follow the latest trends and implement them in their activities to remain competitive.