4 Trends That Will Redefine The Future Of Fintech In 2023

Fintech has emerged as an integral part of the financial ecosystem in India. A new-age concept, fintech aptly highlights the integration of finance and technology. The process of facilitating financial services online is referred to as fintech or financial technology. The innovative concept covers everything from mobile banking apps to mobile payment apps, blockchain and cryptocurrencies, stock trading, and more. 

In the contemporary era, almost all commercial enterprises utilise fintech to improve or automate their labour and processes. Ever since their inception, fintech firms have significantly altered and upgraded the procedures for monetary transactions. The fintech industry has materialised the prolific concept of conducting transactions through smart gadgets and computing systems, which has benefited the country’s overall economic ecosystem.

It is noteworthy that the success of fintech has paved the path for the success of various aligned financial industries like insurtech. One of the pivotal branches of the insurtech industry is claim redressal platforms, where the grievances of the insurance policyholders are duly addressed and resolved efficiently with the assistance of technology-driven procedures. 

Overall, the fintech industry is evolving with market trends to meet customers’ needs, business goals, and regulatory demands. The fintech landscape in India is expected to grow multifariously in 2023.

Insurtech Sector 

With the evident rise in the number of customers hopping on the digital bandwagon, the insurtech industry is all set to bloom in 2023. The sector is working hard towards building consumer trust and encouraging customer participation. One of the most crucial elements in obtaining this level of commitment is communication. 

Important factors like providing regular updates to the customers, making policy changes a fair practice, and offering courteous customer service, among others will assist insurtech to grow commendably in 2023. 

Many of the leading enterprises in this space are considering utilising the regional or vernacular language to communicate with the growing majority of consumers in India. The insurtech domain is anticipated to become stronger by being able to handle the challenges effectively with the use of modern technology to its benefit.

Artificial Intelligence (AI) Technology 

Due to factors like the heavy volume of data and the low cost of processing power, the fintech industry has resorted to the adoption of AI lately. 

The financial sector has reaped numerous benefits from AI such as increasing earnings, productivity, and enhanced product quality. The majority of fintech firms effectively use AI in a variety of finance streams, including cybersecurity and customer support. AI is also altering how internet banking functions. 

Notably, insurtech has implemented the advanced technology of AI for rapid results. Many of the insurance redressal platforms have incorporated AI to resolve insurance grievances. 

For instance, chatbots’ competitive intelligence and compatible language processing are proven to be affordable substitutes. AI also relies less on human assistance as it analyses more data. The new-age technology will be a game changer for the fintech industry in 2023.

The Rising Demand For SaaS Platforms

SaaS products and services have transformed the fintech industry commendably. Due to its appeal among SaaS providers and customers, the global SaaS market, currently valued at over $100 Bn, is expected to continue expanding rapidly. 

Software as a Service (also known as SaaS) allows fintech organisations to avoid the labour-intensive management and installation of complex software and hardware. The SaaS system offers quicker and enhanced customer service which leads to an increased user and consumer satisfaction. 

It is anticipated that in 2023, the number of low-code or no-code solutions, prestigious SaaS, and micro-SaaS products will rise exponentially which will eventually lead to the improved functioning of the fintech sector.

Alternative Finances 

The concept of alternative and embedded finances and their utilisation will play a crucial role in the reformation of fintech in 2023. 

Financial services created outside of traditional banks are referred to as alternative financing. This sector has introduced cutting-edge products which have introduced the scope for innovative corporate borrowing. The non-bank providers or NBFCs (Non-Banking Financial Companies) utilise financial technology to deliver and enhance practical forms of funding in various areas, including insurance, business loans, equity financing, and much more. 

Though the conventional banking system still dominates the business loans market, the fintech ecosystem is expected to grow dramatically with a CAGR (Compound Annual Growth Rate) of 6.3% between 2022 and 2028.

It is fair to predict that the fintech industry will continue to thrive in 2023. The importance of the user experience and the capacity to react swiftly to regulatory changes will play a vital role in redefining the future of the fintech ecosystem in India.