COVID-19 transformed the ways people use technology. It also spawned new business models and showed us the value of a scaled organization. Fintech knows this very well. Some applications thrive on their own while others support dynamically changing markets. Five fintech trends we’re about to go through can not only help you grow the company but even redefine it.
Most interesting recent developments in fintech
Let’s start with a tsunami. Internal and cross-border e-commerce brought immense opportunities for many companies. A huge increase in home deliveries offered massive growth for SMEs around the globe. Many of them jumped on an occasion.
Rightfully so. The rise of international online trade is a phenomenon on its own. Internet sells everything and not only classic items like books or video games. Even basic food items like bread and milk got traction. Because of regional lockdowns but also from a convenience point of view. People just want to feel safe and happy right where they are.
Banking as a service (BaaS) platforms capitalize on the trend. Clear winners are OpenPayd, Curve, and Airwallex. They came from different walks of fintech life and transformed the business landscape.
Another interesting development is the rise of Platform as a Service (PaaS). It means that banks and fintech companies can adapt to regulatory changes and create a customized infrastructure. This enables them to embrace cloud solutions. In this model, a third-party provider offers both hardware and software tools to users via the internet. It makes the whole transaction cheaper for users and more flexible and scalable in nature.
Thanks to that solution, companies can also improve their time-to-market, which is very important in the fintech world. There’s also a matter of master data management (MDM) which provides a single point of reference for all data in the application. It holds information about customer data, transactions, analytical reports, etc. Once MDM is installed, fintechs’ employees can make decisions based on data that is verifiable and adjusted to their doorstep.
Alternative payment methods (APMs) will also get interesting. They already are. Companies like Zilch offer instant access to low-interest credit options. Mechanisms like Buy Now, Pay Later (BNPL) were a consequence of the COVID-19 situation but everything points out to be a success. This mechanism is used not only by people with less disposable income but also by those who just want to introduce flexibility to their spending patterns. It seems that this idea gets traction and is here to stay.
It’s reasonable to predict that fintech will cooperate with businesses to support BNPL models, increasing their partners’ and their own revenue in the process.
This brings us to another argument. Co-opetitors will take over the market. This neologism describes companies that despite being market enemies, are forced to cooperate with each other. They can also be pragmatic about it and work with each other even without market pressure. Just like Apple and Samsung. They fight on a smartphone market, yet Samsung provides vital parts for iPhones. The same goes for the fintech market.
B2C fintechs compete with big banks but recently they have discovered a change to increase market share and optimize revenue streams. Cooperation with them. Organizations like Extend because they take no offense and seize opportunities rather than move away from them. Fintechs have a resilient infrastructure, lower operational costs, innovative business models, and an engaged consumer base. Big banks, despite having outdated infrastructure, can offer experience, money, and scale. Combining young and fresh with big and powerful bring value to the market.
The final interesting trend comes in a form of super-apps. Yesterday fintechs allowed you to pay or buy insurance. Tomorrow they will let you do… well, maybe not everything but the list is nonetheless impressive. Buying tickets for different means of transportation, managing food deliveries, paying for streaming services, and having a personal accountant on a speed dial. Everything that a gig-economy worker or just simply a busy modern big-city employee needs nowadays.
The Asian market is covered by WeChat, Grab, and Alipay. They have revolutionized the lives of billions, yet the West still waits for the same level of interest and convenience. 2022 can be a major shift in that regard, spawning at least one super-app to conquer the stage in at least a few countries.
It will be interesting for sure. Especially when fintech product development is so complicated and demanding. The sheer design of such an application requires deep knowledge of UX and UI processes. Not to mention adjusting the business model, spacing, features, microcopy… Every major prediction points out to the emergence of at least one super-app this year, yet nobody knows what it will exactly look like and from where will it come.
2022 will be a year of shift
Speculations aside, the market points towards a major shift. Fintechs will not only be businesses on their own but also act as a strong supportive partner for e-commerce and other major developments out there. How will it affect your business?
It depends on how much you’re flexible and what niche you want to cover. Fintechs got your back.
Author: Jarosław Ściślak
Bio: Branding, marketing, business scaling, content & company culture specialist. Created shared value (CSV) evangelist. Part of Code & Pepper marketing team. More on: scislak.com
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