The year 2022 is surpassing everyone’s sour expectations, with talk of World War, and a rickety economy. But life goes on and as we adapt to challenges, so do some businesses thrive and grow in ways we never anticipated.
In 2020, COVID-19 brought on the necessity of telecommuting. Now with a virtual environment as the “new normal”, we see new developing trends in banking-as-a-service, and financial technology. In this article, we’re going to discuss the short-term future and how it affects your investment.
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Banking Steps Cautiously Into the New Age
According to a Gallup Poll, Americans have lost confidence in major institutions, including banks and related financial services. Within a year, the satisfaction rating fell from 38 to 33 percent.
Therefore, one of the trends we see is banks working to rebuild confidence back in their brands individually, as well as the need for modern financial services.
Customers want quicker and easier access to their finances, more efficient money-tracking tools, and even some software solutions that help with cash management. Banking software that anticipates loss and spending habits helps to reduce debt and increase savings.
Naturally, they want it on their cell phone devices too!
The Merging of BaaS and Conventional Banks
The issue is more than just budgeting. Banking companies now see an advantage to team up with BaaS providers, since they can create financial products that customers want at a lower cost.
In fact, it’s a partnership by necessity, in the words of one financial expert, since if banks don’t modernize and team up with independent financial service companies, they could become a threat. Integration between financial software and bank accounts is already available offsite. It’s just smarter business to offer services under the same brand name.
Besides, it’s not just the worldwide brands seeking greater profitability – it’s a survival strategy by local community banks, who are feeling economic hardship even more so.
It doesn’t help that many consumers are quick to withdraw bank deposits for digital currency or even request direct deposit into their online accounts, instead of a bank.
Speaking of BaaS, we would be remiss if we didn’t talk about the other BaaS issue going on – major banks are now using blockchain technology, particularly for handling cross-border payments with American, Canadian, British Pound Sterling, And Euro transactions.
As a whole, cross-border eCommerce continues to grow because of the need for home-delivery and online business models. According to a study by Accenture, the total global cross-border payment flow is growing steadily and will soon reach $156 trillion.
Other FinTech Developments
If you’ve noticed banks behaving kindly lately, it’s all for a good reason. Ally Bank recently announced the elimination of all overdraft fees.
Actually, all digital FinTech companies are getting a boost as of late, particularly “one-stop solutions”, according to a McKinsey study. More physical locations have closed, while digital hubs have grown substantially – and more are popping up.
Hey, why meet face-to-face if you can just log in and settle that issue?
Blockchain technology is not just about the convenience of digital ledgers. The increase of startup blockchain companies, yes using all the evil cryptocurrency, is becoming a force to be reckoned with. (For more on crypto platforms to watch in 2022, please visit our link.)
While blockchain may seem volatile, we’re also talking about a technology that is extremely secure, very fast in transferring, and malleable when it comes to worldwide business.
If you think now is the best time to invest in crypto or other commodities, especially given the volatile economy and world news, you can always buy stocks online with SoFi.
FinTech is the Consumer’s Choice
The takeaway here from an investment standpoint is that Fintech is partnering with conventional banking and business in ways we’ve never seen before, and it’s working.
It’s definitely working for consumers, who now have more convenience and assistance with finances, without the need for in-person consultations.
Regardless of what happens in the political world, technology adapts and business always adapts to the needs of individuals. Those who can keep up with “the times”, even if those times are in hyperdrive, are sure to see a return-on-investment.
For more on 2022 business and technology trends, please keep visiting IMCGrupo.com.
