Fintech Market Predictions for 2023: A Global Perspective

The fintech landscape has experienced tremendous growth in 2022, with increased interest and investment worldwide, and an expanding scope that goes beyond its initial definition. This momentum is expected to continue in 2023, with several key trends emerging in the fintech market globally.

A significant development is the growing number of banks offering embedded solutions. Embedded finance has been on the rise, with more banks becoming service providers to non-bank and non-financial institutions. These institutions aim to deliver a customer experience or service proposition involving financial services as a component of a broader offering.

However, the increase in embedded finance offerings delivered through non-regulated entities may prompt greater regulatory scrutiny. Over the next six to twelve months, regulators are expected to pay more attention to embedded finance and intervene to protect customers by clarifying issues such as accountability and available recourse.

In addition, there is likely to be a stronger focus on deal-making in underdeveloped regions. Investors are anticipated to target jurisdictions considered underdeveloped in terms of financial services, leading to more deals in regions like Africa, Southeast Asia, Latin America, and the Middle East.

As the number of unicorn companies, particularly in the US, continues to rise, the status may lose some of its lustre in developed markets. However, it will remain a vital building block for startups in emerging markets and less mature fintech hubs.

Furthermore, many fintechs are expected to reinvent themselves as data organisations and data providers that happen to offer payments and other financial services. This shift aims to differentiate their organisations in the eyes of investors and the market.

Lastly, with the increasing prioritisation of environmental, social, and governance (ESG) factors, fintechs with ESG capabilities are predicted to experience significant growth. Companies focusing on climate change, decarbonisation, and the circular economy are likely to attract more interest in the coming year.

In conclusion, the fintech market is poised for a dynamic 2023, with embedded finance, regulatory scrutiny, deal-making in underdeveloped regions, the changing perception of unicorn status, fintechs transitioning into data organisations, and the growth of ESG-focused fintechs dominating the landscape.