Fintech trends to watch out for in 2023

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After a year of ongoing post-pandemic shockwaves, an energy crisis spanning from the Russia- Ukraine conflict and a complete crash of the crypto market, it’s fair to say that adaptability has become an even more crucial trait for success for businesses across the globe.

The exponential growth of fintech these past few years has been a blessing to many an organisation looking to stay ahead of the curve and deliver simpler, more accessible financial processes to its customers. In 2023, fintech’s influence is set to continue to grow, with these four trends due to headline in the coming year.

Embedded finance

Embedded finance refers to the integration of financial tools or services within the infrastructure of nonfinancial entities. The biggest embedded finance trend in recent years – ‘buy now pay later’ (BNPL) – has found huge success with Gen-Z and millennial consumers, with the BNPL industry worth $120bn in 2021.

Despite criticisms relating to youth debt, BNPL is showing no signs of slowing down and is expected to expand well beyond half a trillion dollars by 2026.

Alternative financing

Businesses have been looking beyond bank-based lenders for some time now, with alternative financing – lending from non-bank institutions – an increasingly popular solution.

Alternative financing is not just loans, either. The rise of revenue-based financing (RBF) and factoring has allowed businesses perceived as ‘high risk’ by traditional lenders to get a seat at the table. Boasting a compound annual growth rate (GAGR) figure of 6.63% between 2022-2028, alternative financing is paving the way for better financial inclusion in the future and will become a less ‘alternative’ solution amid the ecosystem of the next ten years.

Environmental, social and governance initiatives

Answering the climate crisis is by far and away our generation’s biggest challenge, and businesses that introduce fintech enhancements to their environmental, social and governance (ESG) initiatives can expect to enjoy rapid growth as the sector anticipates a further surge of investment.

Bloomberg analysts estimate that global ESG assets will surpass $53 trillion by 2025, which would account for more than one-third of total assets under management. The use of fintech law firms to help manage this critical element should spike, too.

Blockchain technology

Cryptocurrency endured a $2 trillion crash from its 2021 peak. Not necessarily good news for the blockchain, but the underlying technology’s wider applicational base – particularly in relation to cross-border payments – means it still carries much promise.

As per a survey from ZDNET, 52% of consumers see cryptocurrency as a valid alternative for overseas fund transfers, meaning the blockchain still carries huge potential to be a gamechanger in the world of fintech.

Whether businesses are aware of it or not, fintech trends are playing a key role in shaping a new consumer market. Some aspects of the fintech boom may be short lived, but the four elements listed above boast huge potential to stick around for a very long time.


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