Open Banking and NeoBanking - Fintech Trends For 2023

2022 was revolutionary for the financial industry. Changes happened in a good way as the qualities and diversity of available services improved significantly. Because of huge development, it is considered that the fintech industry will not be the same anymore in 2023. There will be much innovation and aspiration to top quality services in different sectors.

Even though it has been a month since the new year started, predictions about new fintech trends are already outlined. Two of the most important trends will be popularized services in neo-banking and open banking services. You will get more information about these and other new fintech trends down below. 

Fintech Industry in 2022 - What Has Changed and What Were The Main Trends

As investments in fintech significantly increased in 2021, the last year was mostly focused on adding more fintech services and providing customers with better possibilities. This increased the number of banks that suggested user-embedded solutions. In general, too, embedded finance was one of the fastest-growing markets during the last year. The same growth was for ESG-focused fintech companies. The result of active investments in this trajectory was increased interest in problems and solutions for climate change, circular economy, and decarbonization. 

Many countries started to implement new regulations for fintech companies to increase the protection of customers and maintain points like stability, availability, and accountability. On the other hand, branding activities from fintech companies increased significantly. This was one of the reasons the focus on underdeveloped countries increased. Fintechs started to become available in areas such as Africa, Middle Asia, and Latin America. Companies started negotiations with countries’ jurisdictions which simply agreed on new offers as it would be beneficial for them. Another trend we saw was a higher number of unicorn companies, especially in the United States. 

All these trends caused the increased value of the fintech industry. If it was about 105 billion USD at the end of 2021, during the last year it exceeded 131 billion USD. Here one of the unusual trends was decreased financing in the second quarter of 2022. More specifically financing was down 39% and it was the lowest level after a 5-month increasing tendency. But even though this, the total value of the market significantly improved and if this rhythm maintains the value by 2030 will exceed 698 billion USD.

Open Banking in 2023

In 2021, the total value of the open banking market was only 15 billion USD, but in 2024 it is predicted that the value will reach about 64 billion USD. The prediction from Statista is based on the high demand and enormous possibilities in the open banking market. 

Open banking allows customers to access their financial data from multiple sources, giving them more control over their finances and allowing for better decision-making. Open banking also enables banks to provide more tailored services and products to customers based on the data they have collected about them. This means that open banking can help people make smarter decisions with their money, as well as help businesses create innovative new products based on customer preferences and behavior patterns.

As such, it's no surprise why open banking will be one of the most important fintech trends in 2023. Its ability to facilitate easier access to financial information while providing greater customization options makes it an attractive option for both consumers and businesses alike.

Neobanking as A Trend in the 2023 Fintech Industry

Similar to open banking services, Neobanking is also becoming increasingly popular as one of the fintech trends in 2023 due to its numerous advantages. More specifically it includes diverse services like digital banking and several types of money transfers as well as investments. Neobanking also makes it easier for customers to access their accounts from anywhere with an internet connection, making it more convenient than traditional banking methods. 

Additionally, neobanks typically offer lower fees compared to regular banks which can help customers save money on transactions. Finally, many neobanks are designed with customer experience in mind so they provide a simpler user interface that allows users to easily manage their finances without having any prior knowledge or experience about finance or technology-related topics.

Other Fintech Trends, We Should Expect in 2023

In addition to mentioned trends, RegTech and AI will be another two of the main fintech trends in 2023 due to their ability to improve efficiency, reduce costs, and streamline compliance. RegTech can help financial institutions stay up-to-date with changing regulations by automating processes such as risk management and compliance monitoring. 

AI also has a range of applications in finance including fraud detection, customer segmentation for marketing campaigns, automated trading strategies for investment portfolios, or algorithmic trading platforms that make decisions based on market data analysis. 

Robo-advisors are another major trend that uses algorithms to provide investors with automated advice about asset allocation or portfolio rebalancing without the need for human intervention. In addition to these trends, there is likely going to be an increased focus on cybersecurity measures due to the heightened threat from cybercrime within the sector over recent years.