Top trends that fintech startups should watch out for
Fintech is poised for massive growth, and you may need to catch up on some emerging trends that will likely impact your business soon.
The one constant about financial technology or fintech is change. Now a $100 billion industry, fintech is rapidly evolving to meet massive global interest and corporate investment.
Driven by rising demands for digital financial services, the industry is expected to grow to around US$900 billion by 2030, for a compound annual growth rate of 26.32 from 2022-2030.
If you’re a fintech startup, the rapid changes and the projected growth of the industry can be daunting. But if you have a glimpse of what’s to come, then you can prepare your company to be more competitive, efficient and dynamic.
To help you keep up with the innovations and new ways of doing business, here are some major fintech trends you need to watch out for.
The rise of super apps
While the concept of all-in-one super apps isn’t new – China’s WeChat and Alipay are longstanding examples – fintech companies are looking to bring the concept into Western markets.
Paypal introduced its own super app in September last year, offering a combination of financial applications including direct deposit, bill payments, digital wallet, and peer-to-peer payments.
While super apps provide several benefits for both corporate and retail, they require significant investment in hiring a team of app developers to build code from scratch.
Some companies have also opted to develop their own super app using white label app software, significantly cutting down development time but at an additional expense.
Either way, fintech providers now have more options and opportunities to create their own super app and improve their competitiveness in the market.
This process, known as hyperautomation, involves the development of a sophisticated digital ecosystem that combines artificial intelligence (AI), advanced analytics, and cutting-edge IT infrastructure to perform various tasks and procedures.
This results in increased productivity using fewer resources, operational flexibility, market trends foresight, and improved risk assessment.
In its 2022 banking and capital markets outlook, international professional services network Deloitte reported steady growth of digitization in the banking industry.
Accounting software Tipalti also released a report that highlights hyperautomation as a “business necessity” of modern finance, especially with the rise of remote work setups in today’s post-pandemic environment.
For future-focused startup owners and managers, hyperautomation may entail significant upgrades to infrastructure or the introduction of fresh talent for their organization to flourish in the future.
Mainstreaming of cryptocurrency services
The cryptosphere is going through tough times, with Bitcoin, Ethereum, and other stablecoins tumbling to their lowest in years while major crypto institutions Tether, Celsius, and Mark Cuban’s Voyager Digital are facing financial and legal challenges.
But with 1 in 4 Americans highly likely to buy crypto in the next year, Wall Street remains undeterred in bringing cryptocurrency into the mainstream.
Major banks such as Goldman Sachs, JP Morgan Chase, and Morgan Stanley have already set up their own dedicated groups to develop crypto and blockchain infrastructure, with JP Morgan going as far as creating its own digital token for international payments.
Early this year, funding for crypto and blockchain startups has also skyrocketed to an all-time high of $25.2 billion, with financial service providers hiring three times as many developers and other staff for crypto projects, according to LinkedIn.
Considering these developments, the US government has taken steps to rein in unregulated crypto markets, with the White House releasing an executive order in March urging federal agencies to protect consumers’ digital assets.
So, while the sector remains highly speculative and volatile, industry players both large and small are steadily working to make cryptocurrency safer and more accessible to the average consumer.
Decentralized finance through blockchain
Blockchain has become inextricably linked with cryptocurrency, but industry leaders are eyeing its decentralized nature for use against fraud and other security applications.
In a 2021 Deloitte survey of industry decision-makers, an estimated 80 percent of respondents agree that blockchain has already achieved mainstream adoption and is scalable for a wide range of industries.
Financial giants like JP Morgan have also begun to develop their own proprietary blockchain tech to validate transactions, while Blockchain-as-a-service (BaaS) providers now offer businesses a chance to develop their own blockchain-based tools, networks, and other related products.
Keeping up with the trends
With the market expected to reach $930 billion by 2030, fintech startups are in a unique position for unprecedented growth.
The key to seize and maximise this opportunity is finding the right people who will help you navigate the challenges and demands of the market.
This means hiring software developers during a global talent shortage, a painful truth that has hindered the growth and development of many startups.
Worse, the sharp digital pivot across industries is projected to sustain the rising demand for developers in the next few years.
Furthermore, finance-related skillsets have become difficult to find on local shores. Demand has driven salaries to skyrocket, making it harder to hire even if you find the right person for the job.
Some fintech players, however, have found ways to beat the skills shortage by expanding their search for talent outside their borders.
Current technologies and business solutions already allow data-secure work environments for fintech leaders who want to build remote teams in a neighbouring region or in other parts of the globe.
To take your startup to the next level, you’ll need help finding world-class talent. You can accomplish this by tapping an experienced outsourcing provider with flexible offerings and access to talent-rich markets.
After checking a provider’s credentials, book a consultation so you can understand their mindset, their strategies, and ways of working. Keep doing this until you find the provider that can best address your requirements.
With proper planning, management, and investment, your fintech startup can ride the waves of change and create meaningful impact on stakeholders.