As we enter the second half of 2023, it helps to take stock of the evolving world of FinTech. For example, the embedded finance and BaaS market is predicted to expand at a massive rate throughout the decade.
This scenario provides intriguing opportunities for financial institutions to grow their business, provided they employ talented technology professionals.
Here are a few FinTech predictions worth exploring for the rest of 2023 and beyond. Use these forecasts to position your company to take full advantage of the continued transformation of this business sector. It ensures organizations with the vision and strong technical capabilities enjoy continued success.
What Does FinTech Look Like For the Rest of 2023?
An Increased Adoption of Embedded Finance
Embedded finance – also known as Banking-as-a-Service (BaaS) – continues to grow in popularity throughout the business world. In this FinTech innovation, retailers provide customers with a third party’s financial service as part of the sales process. These providers typically include banks or credit card companies.
As an example, a retailer offers customers an installment credit option to help drive sales. Both retailers and the financial service provider enjoy additional revenue as a result. Expect the market for these services to continue to grow over the next few years.
Venture Capitalists in FinTech Focus on Profitability
Many of the FinTech advancements of the last few years happened due to investments from venture capitalists. However, industry pundits forecast the rate of investment to drop as VCs focus on driving profits. This approach makes sense with the risk of a recession looming. Still, they expect the amount of new venture capital in FinTech to be higher compared to the COVID-19 years.
Expect More Regulations on “Buy Now, Pay Later” Firms
Some financial services companies offer consumers a Buy Now, Pay Later option to incent sales. In fact, a few firms offer this service to retailers using an embedded finance or BaaS option. It allows the full purchase price to be spread out over a few installment payments, typically four.
A caveat for the BNPL approach involves the lack of a credit check for consumers during the sale. While convenient for consumers, it might result in carrying a debt beyond their financial means. Notably, BNPL late fees and delinquencies are on the increase. As such, expect additional regulations from the U.S. Consumer Financial Protection Bureau (CFPB) on financial companies providing this service.
Need to Hire FinTech Professionals?
When your company wants an influx of IT pros experienced in FinTech, connect with The CERES Group. As one of the top technical staffing agencies in New England, we provide the exceptional candidates you need. Schedule some time with us for a discussion on your current hiring plans.