After 2022, the Dubai Financial Market sector may be different. In the future, we hope to see new changes in the way people live and interact with people.

During the second quarter of 2022, fintech funding dropped significantly, with the lowest in the previous five quarters and down 39% from the peak in the fourth quarter of 2021.

However, fintech is the sector with the most investment rounds globally. It raised $21.5 billion worldwide in Q2 2022. About 90% of people in the United States currently use fintech services. Global quarantines and lockdowns have made digital financial processes more customer-centric. It encourages fintech companies to catch up and actively adopt the latest technologies to deliver the expected level of service and maintain high satisfaction rates.

The fintech market is estimated to reach $698.48 billion by 2030; in 2020, it will be $110.57 billion. Start-ups and established organizations keep pace with change, update their operations, and accumulate enough technical skills and tools. If you don’t grow, you fail. But you also need to ensure the appropriateness of a scalable solution – that’s why you might consider adopting new fintech trends in 2023 to gain an edge over your competition.

We studied the financial industry to find out exactly how fintech companies would approach increasing their efficiency. From BNPL to crypto, how the world of payments is digitizing and revolutionizing, and where fintech innovation has been in recent years – all these details and more about the financial technology trends of 2023 that we covered in this blog post.

WHAT ARE YOU WAITING FOR? LET’S COME TO THE TOP TRENDS!

OPEN A BANK

Statista predicts that by 2024, 63.8 million people will use open banking. Compared to 2020, nearly five times.

Open banking focuses on the controlled exchange of financial information. Account holders can agree to procedures to share their financial data with non-traditional institutions securely. Accessible APIs allow third-party providers to access customer financial data.

Many fintech companies offer budgeting, expense tracking, financial planning, lending, and other services using open banking insights. However, according to McKinsey, only 10% of open banking promises are fulfilled. Nevertheless, this financial technology holds promise. Users are slowly beginning to understand the benefits of working with open data as the exchange of information promotes scientific research, software advancement, and financial services.

For example

A dedicated customer may decide not to change financial institutions because they are satisfied with the reliability and stability of their bank. However, the bank is quite conservative, and many of the digital services offered by its competitors have not yet been adopted. 

1. Customers want to link analytical tools with financial data to analyze customer spending and spending habits.
2. Banks like to retain reliable customers.
3. Therefore, it provides the owner’s data to a third party that undertakes the analysis using the API. It is done through the API.

By opening a bank, account holders benefit from regular reports on balances, expenses, and savings.

NEO BANK
The pandemic has taught us that we can do it all from home, and the financial industry has taken that seriously too. As a result, FinTech has contributed to the development of new banks. New banks look like traditional banks but have no physical location.

Therefore, Neo banks are equipped with all the functions of a traditional bank branch. Instead of traditional bank branch models, many new FinTech companies focus solely on Neo banking.

This is a win-win approach for businesses and customers due to reduced costs and ease of access.

Neobanks are a type of fintech company that exists to reduce the cost of banking services. Compared to larger banks, they generally offer fewer service categories but focus on these categories to improve the quality of these services.

According to Statista, the number of people with at least one new bank account is expected to peak at 39.1 million in 2025, up from 20 million in 2021. At a time when remote working is essential For many businesses, instant transfers, quick sign-ups, and IBAN and ACH accounts that allow full online banking access are a big plus.

REGTECH (REGULATORY TECHNOLOGY)

Laws regulate the activities of financial institutions, and standard practices and regulations need to be known and followed. For example, businesses must maintain accounting records, tax returns, income statements, and customer reports.

According to the schedule, they provide the necessary documents to the regulatory authorities. They verify the accuracy of the data and the legitimacy of the operation. Management technology can help in this situation. RegTech is a type of technology used to monitor regulatory compliance. 

Regulator technology identifies issues that don’t follow the rules and makes them work with the system. Specialized software automates tedious processes, monitors data security, and warns users and bankers about fraud.

Millions of dollars are imposed as penalties for non-compliance. For example, Bank of America Corporation previously had to pay New York State $42 million for providing customers with a superficial explanation of how their stock orders were handled. RegTech makes it easy for organizations to communicate with their regulators so that data can be sent uninterrupted, with compliance monitored (e.g., by complying with PCI compliance rules ), and financial crimes are tracked.

ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING

The global AI in the fintech market is expected to grow to a staggering $26.67 billion by 2026 while maintaining a CAGR of 23.17% from 2021 to 2026. Over 90% of International companies in the fintech sector have relied heavily on AI and machine learning.

By collecting and processing data about customers’ cash accounts, credit accounts, and investments, AI enables financial institutions to monitor their financial health and provide more tailored and personalized service.

Businesses can use cognitive automation, interaction, data analytics, and analytics to improve smart banking. Who can:

customer data management, make recommendations on management strategies, human error detection, and bank quality control.

Artificial intelligence can also interact directly with customers through chatbots and self-learning apps.

ROBO-ADVISOR

With the development of artificial intelligence, many investors can now benefit from computerized financial advice. Robotic advisors and individual money managers use AI insights to show investors the best ways to spend money.

These apps are a disruptive force in the industry and extremely profitable. Based on AI data analysis algorithms, the robo-advisor can:

analyze large volumes of data, adapt to changing environments more quickly than a human mentor, and introduce investors to the best alternative investment options to achieve their goals.

They are especially popular with novice investors who need access to traditional advice. Alternative investment tools have significantly reduced entry fees for investors and allow most people to make money, even with little cash.

DECENTRALIZED FINANCE (DEFI)

Although related to the cryptocurrency market and alternative financial instruments, decentralized finance is a new fintech trend growing in 2023.

Defi is represented by various decentralized financial products that operate without a central authority, such as:

lending, Exchange, payment request, et cetera.

DeFi uses self-executing smart contracts for all management and is open source, giving users more confidence. In addition, it is now easier for multiple blockchains to interact with each other, taking the crypto industry to the next level and opening it up to a wider audience. In the market, many DeFi initiatives can compete with centralized financial solutions.