FinTech in 2022: The Big Regression?

The months running up to Christmas brought a flurry of FinTech projections from PR agencies and friends, all of which I found to be accurate.

I received an email from Lending Club, one of the leading financial technology (FinTech) businesses in the United States, with four key predictions:

Prediction #1: Fintech and bank consolidation will continue to engage in an arms competition.

More fintech mergers and acquisitions were done in 2021 than at any other time in history, and it is projected that this trend will continue in the future. By the third quarter of 2021, CB Insights predicts that 42 fintech firms will have attained unicorn status, a term that refers to a privately held business with a market valuation of greater than $1 billion.

According to our estimate, more fintech organizations, loaded with cash, will look for new ways to expand and drive development through mergers and acquisitions in order to remain competitive (M&A). When banks combine with fintech to deliver new services to their customers that they are unable to give on their own, we might possibly witness a more seismic upheaval in the financial industry.

Prediction #2: The competition for the attention of the client will get more intense.

A single size does not fit all when it comes to financial services and products in the world of finance. What works for one person may not always work for another, and the good news is that financial institutions are beginning to recognize this phenomena.

Because the internet is continuing to decrease the barrier between consumers and retail banking, as it has done in so many other areas, we will see a greater focus placed on digital banking solutions that are precisely tailored to certain customer groups in the coming years.

Prediction #3: Fintech will be exposed to heightened regulatory scrutiny in a number of different areas.

Increased regulatory scrutiny will be applied to financial technology (fintech) as it becomes increasingly relevant in the lives of ordinary Americans. This, we believe, is a beneficial development for the industry as a whole. 

A large number of agencies that undertake investigations into financial services businesses will have new people in place during the next several months, according to the Financial Services Authority. As a result, we believe that fintech will be subjected to more regulation, particularly in the developing industries of blockchain and cryptocurrencies.

Prediction #4: At some point, every firm will transform into a fintech.

Since the beginning of the decade, this next projection has been in the works, and it will only gather steam in 2022 as the economy continues to develop. On a greater scale than now exists, we will see financial services linked with non-financial firms, such as Uber allowing us to pay directly through the app or tipping for your pizza delivery on the same form that you purchase pizza.

Efforts by financial institutions to lower barriers to banking and payment would assist consumers by providing a more smooth banking and payment experience, which will benefit them.

In a similar vein, if you're interested in the expectations of old banks, ABN AMRO has released its forecasts. To consider in this circumstance, there are six important patterns to keep in mind:

  • The financial industry is becoming more and more influenced by big technology... Large technology banks, on the other hand, are likely to emerge. [No]
  • Banks are engaging with fintech startups... and seem to be enjoying [Open Banking] the experience.
  • In terms of technological advancement, digital banking is getting more sophisticated. [mostly involving videobanking]
  • New security threats and solutions are introduced on a daily basis, making it difficult to keep up. [Ransomware is the key to unlocking this]
  • Environmentally friendly measures are being pursued with a strong intention to generate a financial gain. I'm just going to go on and on and on about it.
  • Will cryptocurrencies ever be able to entirely replace fiat currency as a medium of exchange? [Who knows what's going on?]

In my opinion, an interactive map created by the University of Cambridge, which allows you to zoom in and out of each geographic area and country by year and shows how active their FinTech operations are, is the most accurate representation of the current state of contemporary FinTech that I've seen to date.

Then there's the multitude of other forecasts that are flying around, but my biggest prediction, which is something that the majority of people disagree with, is that FinTech will take a blow this year.

It is expected that the United States will be hit by a Great Recession within the next several years. Ant Group's $300 billion initial public offerings (IPO) in China was the starting point for the whole thing (IPO). It is certainly taking place in Europe and America as well at this point in time. What is the Great Recession, precisely, and how did it happen? 

The process of reversing technological progress is now underway. It is not the case that people will reject technological advances. Governments and legislation are at fault for this situation.

In fact, it is quite likely that the FinTech business will be adversely affected by the aftermath of the Big Tech incident in the near future. The FinTech unicorns and their ilk will be closely scrutinized by governments as they tighten their grip on the FATBAGs and other nefarious activities. Even while they may take pleasure in certain aspects of it, the Big Recession will be a reality, particularly in the FinTech business, as authorities dismantle some of the unregulated sectors that they now desire to govern. 

As seen by the stagnation and, in some cases, the collapse of peer-to-peer lending, we should not be surprised. Take, for example, Zopa, which has just declared that it would no longer offer peer-to-peer lending services to consumers. Another example is crowdfunding, where sites such as Kickstarter are having problems getting off the ground or getting things going in the first place. 

As time progresses, we can expect to see governments tighten their grip on everything from BNPL to cryptocurrency exchanges and bitcoin mining.

The year 2020 will see a huge shift away from things that people do not understand and grasp, as well as a significant shift back toward things that people do understand and comprehend. It is referred to as the Great Recession. It's time to get back to the basics of banking and away from the computer.


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