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Top 8 fintech design trends 2023

The future of fintech is digital. By 2024, the industry will be driven by a consumer base that has grown accustomed to using smartphones to make payments and shop for goods.

4 November, 2021
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It's no secret that the financial sector is one of the most innovative industries worldwide. As consumer demands change, so do the needs of the fintech industry. Fintech developments are impacting how people access their finances, save, invest, and spend money. From start-ups to established companies, design trends play a defining role in each company's success. If you are preparing to launch your first fintech product or revamp an existing one, you'll need to understand which design trends are hot for 2023.

It has been predicted that fintech will be worth over $7 trillion in ten years, particularly banking-as-a-service and embedded finance. We're also seeing fintech services becoming mainstream, with around 45% of Americans now having direct knowledge of financial technology services. What's more, digital products within the finance industry grew at an average rate of 9% per year between 2017 and 2023. Keep up with this growth rate by utilizing upcoming fintech design trends, and your business will see the payoff.

All-digital banking

The future of fintech is digital. By 2023, the industry will be driven by a consumer base that has grown accustomed to using smartphones to make payments and shop for goods. As a result, the rise of fintech apps will eclipse traditional brick-and-mortar branches.

In the past, digital banking solutions have been primarily a complement to physical banking. In 2023, however, we'll see a significant shift toward digital-only banking. These banks already exist, with popular solutions including One Finance, Ally Bank, N26, Chime, and Axos.

We no longer need to carry cash; therefore, there is little need for a brick-and-mortar bank. Plus, the ease of opening new bank accounts and switching depending on benefits is an attractive quality to today's consumers.

Open banking

Open banking allows fintech businesses to more easily use customer data obtained directly from their banking institution to provide more innovative products and services. In the EU, open banking has gained additional momentum by PSD2, which requires banks in the EU to give third parties access to some customer account information, including transaction histories and balances.

Open banking will help fintech businesses narrow the gap between them and incumbent banks by better understanding their customers, spending habits, and financial needs. As a result, they will be able to devise more personalized offers for consumers while making more informed lending decisions for businesses.

CaaS, or BaaS in this case, also stems from open banking. CaaS enables financial institutions to focus on their core competencies while giving consumers access to a broad array of products and services without the need for them to have accounts with every financial institution.

Mobile wallets and digital currencies

The growing popularity of new payment methods, like mobile wallets, contactless cards, and cryptocurrencies, means that users are looking for more secure ways to conduct transactions.

Mobile wallets will evolve from a single-purpose app to a highly functional mobile banking platform, serving as a center point for daily financial needs. With the growth of cryptocurrencies, fintech companies will begin looking at this new asset class as a potentially disruptive force in the industry. In fact, many banks and financial institutions have already started embracing the technology behind cryptocurrency.

Cryptocurrency as a method of payment
Cryptocurrency as a method of payment

This rising trend in all-digital banking and payments is leading fintech institutions to make larger investments in biometric software and increased usage of existing authentication methods such as fingerprint readers on smartphones and tablets. This includes using biometrics to verify user identity, like facial recognition, voice, fingerprints, and maybe even palm prints.

Blockchain solutions

Blockchain is the technology behind cryptocurrencies, but it has a huge potential to change the way financial institutions operate. Distributed Ledger Technology (DLT) and blockchain are buzzwords for the fintech industry for 2023 simply because they are the most disruptive technology we've seen yet.

The advent of the blockchain has opened the door to entirely new ways of operating in financial services. The next five years will bring increased adoption, mass customization, and a constant stream of new ideas for all types of companies. It will be a time of great change and challenge, but also one filled with opportunity. The best firms will lead the trend toward interoperability and away from centralized systems, and many will experiment with alternative business models, like the hub-and-spoke model that helps businesses comply with AML and KYC.

AI-powered services

AI will be the most critical technology for fintech in 2023. The move towards AI-driven services is already underway, with many banks and financial institutions experimenting with bots, chatbots, virtual agents, and Robo-advisors.

In particular, we expect to see more customer service automation, as intelligent algorithms take over from people for specific repetitive tasks such as answering common customer queries. This can lead to a better experience for customers and lower costs for the bank. Another growing area is digital advice and Robo-advisors – automated portfolio management services – which can provide investors with simple solutions to complex problems.

Fintech regulations

As fintech matures, new laws and regulations will arise to prevent monopolization, breaches in customer security, and so much more, as happens with every new industry. One of the biggest predicted regulation changes for 2023 will prevent fintech companies from owning the customer data they collect. The trend is already starting in Europe with GDPR, and it will spread globally. Data ownership will become one of the most important issues for fintech businesses because they can't operate without customer data. But owning the data doesn't lead to a downfall for the industry; rather, it opens up fintech companies to be more transparent and collaborate with other institutions.

Collaboration

The new world of fintech means that new players are entering the market on a daily basis, and they're bringing with them innovative technology, products, and services that can change the way we manage our money. This also means that there's more competition for banks and financial institutions, who need to stay ahead of the game if they're to remain in business in 10 years.

With this in mind, there are some key things in particular that banks will need to focus on if they want to remain successful in 2023. One of these is increasing the number of partnerships and open APIs on the market through fintech collaboration. The days when banks could rely on proprietary software, security systems, and closed APIs are over. Banks will need to learn how to work with third-party providers to offer their customers everything they want regarding digital banking services.

Financial literacy

The age of financial illiteracy is over. As consumers are becoming more aware of the importance of financial literacy, they are increasingly demanding that their banks understand them better.

With the emergence of Fintech start-ups offering digital solutions to traditional financial institutions, consumers are now empowered not only with increased levels of information but also with an array of new tools that enable them to make smarter decisions.

Due to this increased demand for more consumer-focused experiences, banks are forced to adapt to stay competitive and relevant in a changing market.

Now's the time for Fintechs to prepare for 2023

The fintech industry has been on fire recently. Not only has it delivered some of the most exciting start-ups and innovations of the decade, but it has also started an invaluable debate on transparency in the business arena.

Finally, we've put a fork in the old ways of banking – payments have gone mobile, banks have connected with social media, and payments are even being made with selfies. It's no longer a case of if the change is coming, but when.

author

CEO and Founder of Merge

My mission is to help startups build software, experiment with new features, and bring their product vision to life.

My mission is to help startups build software, experiment with new features, and bring their product vision to life.

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