The FinTech industry has grown steadily over the last decade, but the prior year has arguably seen more innovation than ever before. Interest and investment in fintech increased significantly in many regions of the world in 2021, expanding its scope far beyond its initial definition. Increased remittance inflows to Pakistan during and after the pandemic have significantly aided the fintech industry’s growth. An online money transfer to Pakistan made by an overseas worker using digital mediums such as ACE Money Transfer is an example of growth in the industry.
This broadening scope, combined with the maturation of several fintech subsectors, increased investment in less mature jurisdictions, and surging corporate interest, is expected to keep investment high as we approach 2022. How will this expansion be defined, and which specific fintech sectors will shine this year? Looking ahead, here are some of the most important predictions for the global fintech market.
The Expansion Of Cross-Border Ecommerce
Progress always entails change, and the last few years have seen transformations that would have seemed unthinkable only five or six years ago. The most significant change is probably due to how pandemic and home-delivery intersected, dramatically altering the concept of a “home-town business.” According to a study, the total global cross-border payment flow is growing at a CAGR of around 5% per year and is expected to reach US$156 trillion by 2022.
The Rise Of “Digital-Only” Banking And Its Impact On Your Business
The discussion doesn’t merely revolve around digital payments here, but it also involves virtual banks. The technology is already available, and there are numerous advantages to switching from brick-and-mortar to the virtual world.
Cloud banking and free-floating financial platforms are already changing the way people bank, and it’s not difficult to imagine a day when the vast majority of the world’s banking will be done online. ACE Money Transfer has already turned entirely digital to keep pace with the customers’ demands and yet planning for tomorrow’s virtual banking world. They look forward to guiding you through the next financial evolution.
An Increasing Number Of Banks Will Provide Embedded Solutions
Embedded finance has become more popular in the last year. It’s well-positioned to expand even further as many banks seek to become service providers to non-bank. And non-financial institutions seeking to deliver a customer experience or service proposition that includes financial services as part of a more extensive offering.
Embedded Finance Offerings Will Face Increased Regulatory Scrutiny
The increased presence of financial products or services embedded within and delivered through non-regulated entities is expected to raise regulatory awareness and intervention over the next 6 to 12 months, as regulators seek to protect customers by clarifying issues such as accountability and available recourse. Growing cyber crimes have also raised awareness to increase regulatory scrutiny to ensure optimum protection of global transactions. Pakistanis working abroad who send money to Pakistan digitally using the services like ACE Money Transfer have ultimate peace of mind when they have fully regulated service providers.
Fintechs Will Focus On Positioning Themselves As Data Organisations
Many fintech will most likely reinvent themselves as data organisations and providers that also provide payments and other financial services to differentiate themselves in the eyes of investors and the market.
ESG-Focused Fintech Will See Rapid Growth
Given the growing importance of ESG in general, there will likely be increased interest in fintech with ESG capabilities, such as companies focused on climate change, decarbonisation, and the circular economy.
A Greater Emphasis Will Be Placed On Dealmaking In Underdeveloped Regions
Investors will increase their focus on underdeveloped financial services jurisdictions, with more deals in Africa, Southeast Asia, Latin America, and the Middle East.
Unicorn Status Will Lose Some Of Its Luster In Developed Markets But Remain Essential In Emerging Markets.
The phenomenal rise in the number of unicorn companies, particularly in the United States, will likely make the status less valuable for companies in developed markets — though it should remain an essential building block for startups in emerging markets and less mature fintech hubs.
Following two years of primarily crisis-driven technological development, it is hoped that 2022 will see a new wave of financial and technological application innovation, regulation, and diversification. Cross-border e-commerce and mass digitisation will continue, pushing all market actors away from traditional models.
As many fintech innovations reach the stage of execution and mass adoption, it is unsurprising that 2022 will see an influx of regulatory regimes to increase market transparency and foster a level playing field. ACE Money Transfer is modernising digital solutions for all those who send money to Pakistan online or to any other country using its services.