What are our fintech predictions for 2023?
Happy 2023, fintech fans!
If you’re anything like me, you’ll usher in a new year by attempting dry January, attempting to run 100k in a month, and immersing yourself in people’s predictions for the road ahead.
Luckily for you, our very own Nostradamuses have been staring into their crystal balls and reading the tea leaves, and I’m excited to share with you their official fintech predictions for 2023…
What happened to our predictions from 2022?
But first, let’s look back before we leap forward. Kinda like that film Memento. Kinda.
Last year, our Elevens predicted:
The rise of the Global South
Variable recurring payments (VRPs) silence the critics of Open Banking
More direct-to-consumer fintechs targeting more specific audiences
How did we get on? Well, I think it’s fair to say Latin American fintech enjoyed a stellar year, with Brazilian darlings Nubank posting yet another quarter of record-breaking revenues in Q3.
In Asia, meanwhile, the market opportunity for Indian neobanks stood at $48bn in 2022, according to research from Inc42. And African start-ups had a pretty good time too.
What of VRPs? Well, we honoured OBIE with the coveted most progressive regulation trophy at our first-ever 11:FS Awards for precisely that reason. Added to this, the UK’s nine biggest banks were mandated to introduce VRPs for sweeping back in July, and Stitch has introduced VRPs to South Africa and Nigeria.
Fintechs aimed at niche customer segments went from strength to strength in 2022. LGBTQ+-focused neobank Daylight netted a $15m Series A to fund their family planning subscription service (check out Co-Founder Billie Simmons on this episode of the Fintech Insider podcast!). Greenwood, the digital bank aimed at members of the Black and Latino communities, raised $45m. By November, over 100,000 customers had signed up for the platform.
I think we should go ahead and give ourselves a pat on the back for those pretty on-the-money predictions. Now let’s see if lightning does strike twice.
Kate’s prediction
Our very own Customer Experience Strategy Director Kate Moody is convinced that we’ll see more “innovation around the ‘unhappy paths’ of fintech” in 2023.
And with good reason, too. If the cost-of-living crisis and Buy Now Pay Later (BNPL) adoption levels continue unabated, expect some real goings-on in the debt management and collection industries, which are ripe for disruption.
According to a survey by InDebted, 64% of UK adults who have interacted with debt collectors found the experience ‘stressful’. The number shoots up to a staggering 74% for 18-34-year-olds. Clearly, this isn’t sustainable. Fingers and toes crossed for some serious action in this area.
Ross’ prediction
As for Ventures Manager Ross Gallagher: “2023 will see instant access to tailored credit finally become more commonplace for SMEs.”
You don’t have to squint too hard to see the rationale behind his thinking. SMEs have been underserved by high-street lenders for far too long. They’re the backbone of our entire economy! It’s high time they were treated as such!
You don’t have to squint too hard to see the rationale behind his thinking.
Credit applications can take up to six months for approval - that’s waiting time that a lot of businesses can ill afford in the current market. And what about when the answer is ‘no’?
Sadly, designing meaningful propositions for such a diverse customer segment is easier said than done. And with Brex’s eyebrow-raising pivot in August last year, things got a little bit harder. Fortunately, the issue hasn’t escaped the attention of industry leaders. EY released a report on The untapped potential for Fintech companies to serve small and medium-sized enterprises in Q1 last year.
Let’s hope Ross is right.
David’s prediction
And rounding out our 2023 predictions, the man who needs no introduction, 11:FS Group CEO and Co-Founder David M. Brear: “2023 will see big banks face into their core systems issues.”
Heavy is the incumbent that wears the tech debt, or something. With the likes of Thought Machine maturing like a fine cheddar in the market, there’s a real opportunity for the brick and mortar institutions to address their baggage in a variety of interesting ways.
Heavy is the incumbent that wears the tech debt, or something.
Coupled with that, there’s a lot of talent and technology ripe for the picking should any fintechs fail to raise funding in the new year…
What does 11:FS Pulse predict for 2023?
Our in-house experts over at Pulse have been reading their fair share of tarot cards, too, and among many other predictions for the year ahead, have concluded that: “High-net-worth (HNW) and ultra-high-net-worth (UHNW) offerings will heat up” over the next 12 months.
Innovation in the wealth and private banking space is primed to go full supernova in 2023. The rise of alternative asset classes can take some credit here - there’s a real uptick in demand for digital solutions both for HNW and everyday investors.
With the Great Wealth Transfer unfolding before our eyes, younger generations of HNW individuals, who are typically digitally native, will demand to have their needs met. Coutts and Credit Suisse are ahead of the game with their offerings, and our Pulse brainiacs expect to see more activity here with such high stakes at play.
For more winning insights into the trends set to shape the industry this year, sign up here to download the 11:FS Pulse Report 2023, dropping later this month.
And don’t forget to tune into our Fintech Insider podcast. We cover the latest news and hottest topics from the wonderful world of fintech.
See you in another 12 months.