While fintechs have been slowly changing the financial landscape for some years now, the pandemic was the pivotal point that accelerated their adoption by years. The pandemic has also spurred a wave of innovation, creating a wide range of services and products for the user. As we enter the third year under COVID’s shadow, here are some of the trends that are expected to shape the industry in 2022:
With digital-only presence, neobanks are fast emerging as the preferred alternative to legacy banks for the digital-savvy generation. Although most neobanks have to partner with traditional banks as the RBI does not yet permit digital-only banks, they offer some distinct advantages over their traditional counterparts. With easy onboarding and lower fee, neobanks provide convenient digital alternatives for products like current accounts, credit cards, loans and even trade finance.
According to one estimate, the global blockchain market is expected to grow at an impressive CAGR of over 67% to reach $39.7 bn by 2025 from $3bn in 20201. While a 2019 NASSCOM report revealed a less-than-impressive blockchain adoption2, this scenario may finally turn for the better this year. The reason for this projection lies in the rapid digitisation which provides the foundational infrastructure for blockchain. This will finally allow businesses, and the fintech industry in particular, to exploit its many use cases in capital markets, public sector, and insurance and banking industry.
Recently introduced, the account aggregator ecosystem allows individuals and businesses to share their digital financial data. Aggregators are expected to smoothen the usual hassle of financial transactions, such as getting notarised documents or multiple authorisations. By allowing all these transactions through a simplified mobile-based system, the account aggregator ecosystem is expected to boost the lending and wealth management industry.
With rapid improvements in AI-based voice technologies ensuring high precision in natural language processing, voice-enabled payments are expected to be the next big trend in the payment industry. The technology is expected to pick up because it satisfies a key requirement of the industry, that is, to ease user experience. Since speaking is easier and quicker than typing, we can expect more adoption in this areas.
The lightning pace of technology underscores the rapidly-evolving fintech industry where each new wave of innovation brings more convenience and transparency for the masses. As fintechs begin this year on a strong note, it’s time to watch this space for new changes and ideas.