The last couple of years has seen some major changes in the payday loan industry. For instance, new companies are popping up all over the place while others are being bought out by larger corporations.
The question is, what will happen next?
To answer that question we need to look at a few trends that could shape how this industry moves forward.
Table of Contents
- 1 Top 10 FinTech Trends to Watch out for in 2022
- 2 Conclusion
Top 10 FinTech Trends to Watch out for in 2022
One thing is certain, the payday loan industry in the US states has boomed in the last couple of years. This is largely due to the fact that there are so many people who are struggling financially.
In addition, many people don’t have access to traditional forms of lending, such as banks. This has led to an increase in the number of payday loan companies.
Now, let’s take a closer look at some of the most noticeable FinTech trends that are expected to boom in 2022.
- BaaS -Banking as a Service
- Anti-Money Laundering (AML) Screening
- Digital and Neo Banking
- Customer and Data Experience
- Defi – Decentralized Finance
- Open Banking Concept
- Cross-Border E-Commerce
- NFC System of Verification
- Mobile Payment – Cashless World
- Buying now | Paying later
Now, let’s take a closer look at each of these trends.
BaaS -Banking as a Service
BaaS is a model in which financial institutions offer their services over the internet. This allows customers to access these services from anywhere in the world.
This trend has been on the rise lately due to its convenience and affordability. In fact, a study by MarketsandMarkets predicts that this market will grow from $11.27 billion in 2017 to $35.87 billion by 2022 with a CAGR of 21%.
So, what does this mean for the payday loan industry?
As more people turn to BaaS, it’s likely that they will choose short-term lenders over brick and mortar stores. This is because of convenience.
This could lead to an increase in demand for these loans as well as other financial services provided online such as bill payments, etc.
Anti-Money Laundering (AML) Screening
With the increasing number of fraud cases and money laundering, many countries around the world have tightened their regulations on financial institutions. This means that they will need more sophisticated ways for verifying clients’ identities and spotting suspicious transactions.
To keep up with these regulations, financial institutions will need to invest in advanced tools and technologies such as automated AML screening. However, these tools are not only costly but also require a lot of time to set up.
So, anyone who would want to use such a service will need to partner with a financial institution that has the necessary infrastructure and experience in this area.
Digital and Neo Banking
With digital banking gaining more popularity all around the world, it is about time that we see more of a shift towards online-only service providers. This trend has been seen in countries such as China, India, and Sweden.
In addition to this, we are also seeing the rise of neo-banks. These are banks that offer their services solely through digital channels. This allows customers to conduct all their banking activities from their smartphones or computers.
Customer and Data Experience
Nowadays, customers are looking for more than just financial products and services. They want a banking experience that is convenient, easy to use, and tailored to their needs.
To meet these demands, banks are investing in new technologies and platforms that improve the customer experience. This includes everything from chat-bots to AI-enabled virtual assistants.
Defi – Decentralized Finance
As we move towards a more digital world, we also see the rise of decentralized finance. This is a model in which financial transactions are carried out without the need for intermediaries such as banks or credit card companies.
This trend has been made possible by the advent of blockchain technology and cryptocurrencies. For example, the use of blockchain can help to streamline the entire process of issuing and settling financial transactions.
Therefore, blockchain technology is expected to play a big role in innovative platforms such as decentralized finance.
Open Banking Concept
The open banking concept refers to the idea of banks sharing their customer data with third-party providers. This allows customers to access a wider range of products and services from different providers.
This trend is being driven by the increasing demand for innovation and competition in the financial sector.
The cross-border e-commerce industry has seen significant growth in recent years. According to the World Trade Organization (WTO), this sector is expected to grow by around 20% each year until 2025.
This trend can also be attributed to advancements in financial technologies such as blockchain and other payment services available online. One example of these services is PayPal.
However, we are also seeing a lot of NFT s (non-fungible tokens) being used in cross-border e-commerce transactions. These tokens are unique and can be used to represent different products or services.
Mobile Payment – Cashless World
One of the biggest trends in finance these days is mobile payments or cashless societies. According to MasterCard, there are already around 205 countries that have shifted towards a cash-free model where electronic/mobile payment methods dominate transactions.
This trend has been made possible by technological advancements such as the rise of NFC and contactless payment services.
Fintech trends are always changing, but what will they be in 2022? There is a lot of exciting progress being made in this industry, and it’s important to stay updated with these changes if you want your company to succeed.
Our article also includes predictions about how each trend may change or develop over time. Some people think that blockchain technology could help other industries like healthcare which would have huge benefits because transactions don’t need third-party verification anymore.
Others predict that cryptocurrencies will continue to grow in popularity even though there has been some negative publicity lately due to scams and frauds involving Bitcoin exchanges.All in all, it’s always a good idea to stay informed in the field of fintech.