As we step into the new year, the financial technology (Fintech) landscape continues to evolve at a rapid pace
In 2023, several key trends are expected to dominate the Fintech sector, offering exciting opportunities for innovation, growth, and improved financial services. Let’s explore some compelling Fintech predictions and the promising opportunities they present:
Online Lenders
Lending is going to be hit hard. Lenders have to manage three big tailwinds in today’s market:
- Rising delinquency rates and charge-offs.
- Higher cost of capital for the debt they lend.
- Decreasing demand from customers because of higher interest rates.
Neobanks
Neobanks transformed the customer experience of traditional banks by offering better digital products and lower costs. While big players, like Chime, who raised large amounts of capital will be fine, expect to see consolidation among the smaller neobanks.
The reality is that many neobanks have customers with small average deposit balances, and deposits are critical to banking business models in the long term.
Fintechs serving SMBs
Fintechs that serve SMBs rather than larger midmarket and enterprise customers are more likely to lose their SMB customers. This is why you already see businesses like Brex moving away from serving SMBs.