Predicting the Fintech Innovations of 2022.
Updated: Jan 4
For the past few decades, fintech has been a key aspect of the advancement of global economic empowerment. With continuous innovation and technology surrounding the financial services industry, the future looks promising for this booming market. Here are some predictions from experts in the field of fintech about what to expect in 2022.
More people will use cashless transactions
In a recent survey, 86% of consumers worldwide reported that they now use digital payments. While this is especially common for those who live in developed countries, the transition to cashless transactions is coming to emerging markets as well.
The increasing popularity of fintech has led many experts to believe that by 2022, more people will use cashless transactions than traditional ones.
While this may seem like a positive way to spend less time and money on transaction costs, it also means that some of your privacy will be lost when you do this. The lack of physical currency may also have an impact on our ability to control spending behavior and curb the temptation of impulse purchasing.
Ultimately, though, the increased adoption of tech within fintech has created a step up in convenience for users while still maintaining their privacy.
Banks will be completely digitalized
There will be a shift from the use of paper to digital financial transactions. The use of digital means will make it much easier for customers and businesses to interact with services. With this, there will be less chance of manual errors and more efficient financial management.
The shift towards digital banking also means that banks can easily integrate with third-party applications. This allows for greater flexibility in how customers are able to access their accounts as well as manage their finances.
There will be a shift towards mobile-only payments
According to a report by Juniper Research, mobile-only payments will be commonplace in 2022. With the increased accessibility and popularity of smartphones, it is anticipated that small transactions will be conducted on a daily basis through this device, largely reducing cash usage.
Furthermore, social media platforms like Instagram will adapt their features to cater specifically to people who use mobile wallets. This will make fintech services more accessible and convenient for users who are always on the go and have no need for a physical wallet.
It's expected that within five years, at least 50 percent of all transactions will occur through mobile devices as opposed to traditional payment methods like cash or credit cards.
Blockchain will rise in popularity
Blockchain is a decentralized digital ledger that records transactions without requiring a central repository. Blockchain technology has the potential to disrupt industries such as finance and banking, creating a decentralized system where trust is established through encryption.
In fact, the blockchain market is expected to grow from $310 million in 2018 to $3.1 trillion by 2022--a 755 percent increase! The reason for this rise? Companies are realizing that blockchain can enable better business transparency and security. In addition, it will make it easier for businesses to conduct transactions with one another across borders, which is expected to increase opportunities and reduce costs in global markets.
Fintech startups and enterprises will consolidate their services
Fintech startups and enterprises will consolidate their services: in the past few years, there has been an exodus of fintech companies entering the market. This trend is expected to continue because of a lack of talent and resources. In order to remain competitive, these startups will need to consolidate their operations so that they can focus on providing one machine learning service instead of many.
The consolidation will happen for two reasons: talent issues and data sharing
Fintech startups could be more successful if they could consolidate their efforts and focus on just one machine learning service. This would ensure that the company is able to effectively manage data, staff members, and risks in this emerging industry. The lack of talent in this field is also problematic because it prevents firms from growing as fast as they would like. Unless they are able to recruit talented individuals from outside the industry, these firms will not be able to compete with other fintech companies who already have employees in place.
In order to address both staffing problems and data sharing challenges, fintech companies need to invest in partnerships with each other so that they can share data more efficiently. As partnerships are formed between firms, the cost of acquiring talents would decrease significantly for those firms
Financial institutions are looking to embrace AI technology.
The future of fintech hinges on the implementation of artificial intelligence technology. The growing demand for AI is here to stay, and financial institutions are already investing in it. As a result, by 2022 we will see an increase in the use of machine learning applications that predict market trends, manage portfolios and even make autonomous trading decisions.
This means that financial institutions will be able to deliver smarter solutions to their customers with greater efficiency. This will also allow them to operate more seamlessly.
Furthermore, businesses are looking to implement AI technologies within their own operations as well. In fact, the adoption of AI across all sectors is expected to grow 4-fold over the next two years.