Greetings, and welcome to this month’s topic: “The Top 10 Fintech Trends to Watch for in 2022.” As you’re aware, Nuvei constantly looks to the future to keep you at the forefront of business and payment opportunities. This month’s article focuses entirely on what we see as the hottest trends and the biggest ideas that you need to know about as we move into a new age of payment processing! That said, let’s get started, and remember, you read it here first.
1. The Rise of Cross Border eCommerce
Progress always means change, and the past few years have seen changes that might have seemed impossible only five or six years ago. Probably the biggest change is due to how Covid and home-delivery intersected, dramatically changing the very concept of a “home-town business.” Based on a study published by Accenture, the total global cross border payment flow is growing around 5% (CAGR) a year and tipped to top US$156 trillion by 2022.
Thanks to the explosion of eCommerce, international transactions offer enormous growth potential for small businesses. We’ve been thrust into a new world of cross-border commerce, where consumers expect easy and simple payment solutions as a matter of course.
2. The Rise of “Digital-Only” Banking, and How It Will Affect Your Business
We’re not talking about digital-only payments, we’re talking about virtual banks. The technology is already here, and there are a lot of benefits to be found in eschewing brick-and-mortar for the virtual world. Cloud banking and free-floating financial platforms are already changing the way people bank, and it’s not hard to foresee a day when most of the world’s banking will take place entirely online. Nuvei is already planning for tomorrow’s world of virtual banking, and we look forward to helping you through to the next evolution in finance.
3. Blockchain Technology Is Redefining How Your Business Will Operate
Blockchain’s adoption by financial institutions has been slow but is still a significant trend. In fact, we’re seeing more blockchain-based startups and increased use of crypto technologies across multiple business sectors. Let’s look at a few of the reasons why.
Blockchain is very secure.
Blockchain’s use in digital identity management (DIM) provides unbeatable security for both ends of the transaction funnel. Blockchain is being used increasingly to prevent fraud and manage regulatory and audit issues.
Blockchain is very fast.
Blockchain can accelerate asset transfers, payments, and even investments, while simultaneously eliminating errors that cause delays.
Given these advantages, it’s easy to see why Blockchain is a trend none of us can afford to ignore.
4. Artificial Intelligence and Adaptive Machine-Learning–Where the Industry Stands
From traditional establishments testing automated advisors to advanced algorithms assessing credit profiles, we’ll see companies expand their use of intelligent technologies. The rise of artificial intelligence, machine learning, and robotic process automation provides multiple benefits to those in the financial industry, such as decreased risk from loan defaults, better risk management, operational improvements resulting from data collection and analysis, and enhanced customer experiences.
5. The Coming Trend of Platform as a Service (PaaS)
Fintech is a constant struggle between convenience and security. As banks adjust to evolving regulations, customers will benefit from the creation of APIs to their data. With PaaS, institutions can adapt to changing needs with customized infrastructure that allows them to embrace cloud platforms fully. These services provide the infrastructure to perform a variety of tasks, including team collaboration, resource management, payment processing, and credit risk management.
6. From Competitors to Collaborators
Established banks and other financial institutions are looking at the technological innovations that the startups are bringing to the table. In a time when so much is changing, it’s easy to see why new, innovative financial services might be at odds with older, traditional institutions. One of the biggest upcoming trends is the move towards seeing opportunities instead of competition. Old and new financial services will continue to work together to the mutual benefit of both. If there’s a buzzword for fintech in 2022, “collaboration” should be it.
7. Mobile Payment Options Go Mainstream
Mobile banking puts control into the consumer’s hands. This fintech trend covers a range of payment options, including ACH, virtual currency and blockchain. These choices change how consumers view mobile banking and fund transfers.
More and more customers embrace smartphone payments, and we in the financial services industry worry about how mobile technology will handle increased transactions. Upcoming technology ensures that networks can handle higher quantities of transactions and provide a reliable experience. As more consumers leave behind their credit and debit cards, financial institutions that adopt digital payment features will attract and retain customers.
8. Payroll Fintech Is Becoming a Major New Player
Fintech has traditionally been focused solely upon payment from consumer to merchant, but that’s all poised to change. Next year will see payroll options like salary on demand, salary advances, crypto payroll, and early direct deposit come into the mainstream. These are significant opportunities that Nuvei expects to become a big part of how we all do business.
9. Buy-Now-Pay Later Goes Mainstream
With the rise in popularity of online shopping and new generations coming online, the adoption of new payment options is happening faster than ever before. Take, for example, buy now, pay later solutions like Klarna and Afterpay, where consumers can now even convert their homes into a ‘virtual changing room’ by trying before they buy.
10. Conventional Institutions and Fintech Blend Services
It’s no surprise that with the need for market fluidity and an increased emphasis on technology, traditional institutions investing in fintech technologies are growing at an exponential rate. The past few years have given us RegTech and InsurTech along with dozens of other hybrids that give conventional organizations a way to update their infrastructure and cut long-term costs. Fintech startups will continue to capture more of the market through strategic partnerships and consolidation.
For even more on upcoming technologies and trends, stay tuned to future articles. Nuvei continues to keep you informed and on top of the industry!
|Russell Palay is Nuvei’s VP Product. He is a proven senior-level leader in the electronic payments and campus industry product, technology and business space with over 20 years experience leading, developing and implementing innovative global market-facing solutions and establishing strong strategic partnerships within the financial services and payments industry, training, certification, higher education and eCommerce space.|