Top 6 fintech trends in 2022 – innovation and development

Fintech continues to be one of the hottest industries in the world. As implementations, innovations, and regulations increase, they are becoming more and more important to both customers and companies.

This game-changer has happened and will continue to evolve in 2022. There’s a lot on the horizon for financial technology, and below we take a look at some of the top fintech trends we’ll see in 2022.

Payment solutions

We will still see mainstream adoption of contactless payments as one of the top fintech trends in 2022. In the beginning, it was a strange idea that turned into an ever-evolving sea of possibilities, and now we can pay seamlessly through our phones, NFC-enabled wearables like smartwatches, or even through sensors when we leave certain grocery stores that have already identified us and our bank accounts.

Recent events have already had the restaurant industry switch the entire banking transaction directly onto smartphones, from ordering on the phone to checking out and paying by phone to minimize contact and improve efficiencies.

This is also going towards more traditional hardware such as virtual assistant technologies that can use your voice commands to add items to your cart seamlessly.

In addition, more research and development are being done in the voice-authenticated payments area for fintech to get to a point where we’ll simply be able to order anywhere in our home with a receiving speaker or microphone.

Data aggregation

With these additional touchpoints, data aggregation and big data are going to take on a new meaning and become one of the top fintech trends in 2022.

From here on, it grows exponentially as every interaction related to financial actions – from remittances to information handling and payments – is aggregated. Larger financial institutions use this information to better support and serve their customers.

Innovators are combining this with machine learning and artificial intelligence as core components in fintech and traditional banking. Even now, more automated services are happening everywhere through chatbots to provide support.

In addition, functionality such as reviewing creditworthiness is leaning more toward historical data analysis, behavioural analysis, and pattern recognition models to allow for a more systemic approach for those that are applying for credit. All of this frees up resources from repetitive tasks that were cumbersome and expensive in the financial industry.

Web3 is the mainstream

When looking at the trends in fintech 2022, Web3, or what is also known as the future of Blockchain, takes centre stage. This is a vast area that goes beyond just cryptocurrency, and extends to the more general use of this high-tech ecosystem.

Two major trends have hit 2022 by storm and will continue to do so in the Blockchain space.

The first is decentralised financing or Defi for short. Here, the banks themselves are completely removed from the equation by peer-to-peer financial systems.

Whether it’s providing liquidity or lending, no regulatory bodies, paperwork, or applications are needed to get financial support. No one goes to a bank. It is all individuals who either provide the service or receive it.

The second one is the rise of NFTs and the early stages of the Metaverse. Although there are some polarized views regarding NFTs, their underlying technology is a precursor of how to store and prove ownership of digital items securely.

As we continue to move towards a more digital world, we may see more use of NFTs alongside other fintech trends, seeing fewer art-based NFTs and more that cannot be hacked, cloned, or counterfeited.

RegTech and RaaS

With all of this openness, whether it’s through web3 or interconnected hardware, there is also a growing subdivision of fintech called regulated tech or RegTech. This has become a huge trend over the past few years and is one of the biggest trends to continue to see in 2022.

There are a great number of companies out there that are focused on developing seamless ways for banks to handle initial onboarding and KYC (Know your customer) processes through smartphones and apps versus going into an actual place.

These companies are connected to global databases that search sites and government databases and have built-in scoring systems to help protect digital financial companies trying to onboard new customers. A big issue in the past was the lack of a physical presence, and with the rise of RegTech companies, they’ve been able to go on a global scale quickly.

These types of companies don’t just stop at the onboarding process but provide regulation as a service (RaaS) to many fintech and even traditional banking institutions. This is because they can aggregate data, combine it with machine learning and handle transaction monitory tasks to fight money laundering and other global crimes.

Cybersecurity enhancements

As everything moves towards an all-digital footprint, there will be increased integration with biometrics. For example, we’re already seeing fingerprint-only requirements for transaction approvals or even logins that are displacing two-factor authentication or passwords. This is because biometric reading technology has become more widespread and cost-effective.

These advancements also help address the growing cybersecurity needs of fintech companies. As many of these companies started with an online, digital-based approach, there is a constant threat of being hacked and cybersecurity measures are increasing, as well as the separation of data across different areas in the cloud.

If there is a breach, it is at the very least an isolated and hopefully easily remediable incident.

Online banking

Fintech companies are getting better at banking options. There are more partnerships between larger financial institutions and companies that offer innovative financial technology solutions.

One of the most interesting fintech trends that 2022 presents is how banks are already looking to reduce their physical footprint and move into technology. It’s not so much about having a physical presence as it is about offering digital banking services wherever there is an internet connection.

Whether it’s eliminating branches altogether or integrating some of the best practices of fintech, we’ll continue to see a synchronization between the two.

This movement is beneficial for the financial industry, which had long since come to its senses to undergo a major overhaul on a global scale. It will be great to see these continued efforts towards seamless connectivity and integration continue.

Disclaimer: Please be aware that the contents of this article and the myPOS Blog, in general, should not be interpreted as legal, monetary, tax, or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.