3 trends driving the FinTech industry’s growth in 2022
The payments market and the FinTech industry as a whole have experienced numerous unusual challenges in recent years, ranging from natural disasters such as the pandemic to economic and political crises like as Brexit and the recent Ukraine crisis and the ensuing sanctions against Russia. Despite the turmoil, market participants continue to innovate, resulting in new trends that propel the sector ahead.
Here are three new FinTech trends to look out for:
A rise in A2A payments:
Account to Account Payments is abbreviated as A2A Payments. This function allows users to transfer money between Credit Union accounts and accounts at other financial institutions.
A2A payments are a step forward in the rapidly evolving payments market. This method eliminates the need for third parties by allowing payments to be transferred directly from customers’ bank accounts to the merchant. The technology embraces the great potential for businesses of any size or industry by assisting with speedier payment processing and lower costs. A2A payments have the potential to radically redefine the FinTech market as we know it, a transformation for which payment service providers must be prepared.
The seamless integration of financial services into a typically non-financial platform is known as embedded finance or embedded banking (NBFC). Customers can now use financial services directly from the app and in context.
To fulfill the growing need for embedded finance, financial institutions are increasingly providing banking as a service (BaaS) options, which are typically white-labeled or co-branded services that nonbanks and non-banking apps can use to serve their consumers. In India, for example, consumers can use a ride-hailing app like Uber or Ola to make cashless payments.
Because BaaS is typically provided to clients via APIs and requires robust risk and compliance monitoring on the side of the integrated financial partner, ensuring that it works will necessitate contemporary technologies and capabilities.
Embracing green finance:
Human activity is causing unprecedented and sometimes irreversible climate change. The United Nations has set an ambitious target for the globe to achieve net-zero emissions by 2050 in order to improve the planet’s health.
FinTechs are rising up to the task, from assisting in investing in a sustainable future to assisting clients in reducing carbon emissions, planting trees, and launching wooden cards. FinTechs are also re-evaluating their own environmental impact, sponsoring green innovation, and even launching solutions to help other businesses reduce their carbon footprint.