Between crypto market crashes, wars and the ‘new normal’, the anticipation for what the financial climate is going to look like is palpable. 2023 is well and truly upon us and we want to know what's hot and more importantly what’s not when it comes to Fintech trends.
It's safe to say the Covid-19 virus has left businesses and the economy bamboozled. Although a majority of bank leaders claimed in an ADB Survey that they didn’t reduce the amount of capital dedicated to supporting trade, we are seeing a massive rise in Alternative Finance. But what is alternative finance?
Alternative finance is business funding offered by non-bank institutions. One of the best examples of alternative financing is RBF or Revenue Based Financing. RBF Funding is paid based on a percentage of the business's monthly earnings, rather than fixed scheduled instalments. Although these types of funding have been around for decades, we are seeing an increase in popularity with the rise of e-commerce and start-up businesses.
Embedded financing is one of the many ways non-financial institutions are continuing to grow through the Fintech boom. Embedded financing is the term used when describing integrated financial tools or services within a non-financial business, with a ginormous web of abilities, embedded financing describes banking and investment all the way to payments processing and insurance.
Of all forms of embedded finance, the biggest growth is the Buy Now Pay Later (BNPL) scheme. The most popular form is AfterPay, or their European partner Klarna, where you can split any payment into multiple smaller monthly payments. Being most common with Millennials and Gen Z this trend is showing no signs of slowing down, with FOX claiming by 2026 BNPL transactions will have reached $576 billion USD.
After a rollercoaster 2022 for crypto investors and traders, Blockchain Technology is projected to get even bigger and better in 2023. This year there is an emphasis in the blockchain world on changing the face of international payments. The technology aims to address the issues by increasing speed and improving security as well as managing lower costs, making international financing accessible to a greater population.
In a recent ZD NET Survey, over 50% of consumers viewed cryptocurrency as a valid way to make international payments, with just under half saying they are already in the process of making crypto international payments. Blockchain technology has everywhere to grow and a realistic look at being the future of how payments are made, received and monitored.
As we move forward into 2023, the financial climate is in a state of uncertainty due to various factors such as wars, market crashes, and the ongoing pandemic. The fintech industry has been flourishing despite these challenges, and we're seeing some interesting trends emerge.
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