FinTech Market 2023
1. Decentralized Finance (DeFi)
DeFi utilizes distributed ledger technology to enable financial transactions without centralized institutions. It offers advantages like convenience, better integration, and higher transparency. The growth of DeFi protocols facilitates new crypto companies, predicting industry growth from $11.78 billion in 2021 to $231.19 billion by 2030 oai_citation:1,Top 2023 DeFi Trends to Watch | CoinGecko. Key questions for your startup would include: How will you ensure the security of transactions on your platform? Can you provide a user-friendly interface that simplifies the complexities of DeFi, such as private key management?
2. Neobanking
Neobanks offer digital-only banking services with a focus on convenience and personalized experiences, expecting to reach over $600 billion by 2028 oai_citation:2,Neobanking in 2023: Emerging Trends and Opportunities. Utilization of AI and ML for personalized services and incorporation of cryptocurrencies and blockchain for secure transactions are current trends oai_citation:3,Neobanking in 2023: Emerging Trends and Opportunitiesoai_citation:4,Neobanking in 2023: Emerging Trends and Opportunities. Consider if your startup can leverage these technologies and what unique value you can add to the already competitive neobanking landscape.
3. Buy Now Pay Later (BNPL)
BNPL allows consumers to defer payments over time without interest, which can be beneficial for those struggling with the cost of living. However, with increasing use, there is a rise in late payments and financial harm to consumers oai_citation:5,BNPL: Buying now, but who ‘pays’ later? | Deloitte UKoai_citation:6,BNPL: Buying now, but who ‘pays’ later? | Deloitte UK. As regulation is catching up, you should think about how to build sustainable credit models and integrate robust affordability checks to stay ahead of regulatory requirements oai_citation:7,BNPL: Buying now, but who ‘pays’ later? | Deloitte UKoai_citation:8,BNPL: Buying now, but who ‘pays’ later? | Deloitte UK.
4. Open Banking
Open Banking is set to advance in risk decisioning and consumer financial services access, with large institutions expected to use it for credit scoring oai_citation:9,Feature: What Open Banking trends will emerge in UK and Europe in 2023? | Open Banking Expo. Embedded finance and the blurring lines between e-commerce and traditional banking services are major trends oai_citation:10,Feature: What Open Banking trends will emerge in UK and Europe in 2023? | Open Banking Expo. Your startup must navigate regulatory requirements and ensure secure, seamless integration with other financial services.
5. Green Finance
Green finance encompasses activities like green bonds and loans, which have grown to a market value of $540.6 billion oai_citation:11,Ways To Introduce Green Finance In 2023. Strategies include financing environmentally friendly businesses, consumer green investing, and green embedded finance, which offer favorable conditions for eco-friendly product purchases oai_citation:12,Ways To Introduce Green Finance In 2023oai_citation:13,Ways To Introduce Green Finance In 2023oai_citation:14,Ways To Introduce Green Finance In 2023. For startups, the challenge lies in accurately assessing the environmental impact and creditworthiness to ensure sustainability.
In deciding which trend to pursue, consider the following questions: Which trend aligns best with your startup’s mission and expertise? What customer needs can you address? How will you manage regulatory challenges? What competitive edge can you offer? The answers will help you determine the most promising direction for your startup.