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The case for optimism: encouraging fintech trends in 2023

The 2022 post-pandemic year was arguably one of the most challenging for fintech. The economic downturn has hit the industry hard, changing the motivation of investors, consumers and startups. However, any crisis always opens up new opportunities. Despite the current downbeat pessimism on many sides, the fintech industry is not at the 'end of history' at all. To add some sunshine to this discussion, I have compiled some encouraging trends that our credolab team believes will define the industry in the coming year.

Pursuit of customers, not investors

Investors have indeed become more reluctant to spend money, and fundraising now takes longer. Bridge rounds and convertible notes have become more common as startups have become less confident in their ability to attract a significant round amid investor wariness. “Extending the runway” is a common refrain now. According to Dealroom, $1.6bn worth of convertible notes has been issued this year, with the vast majority in rounds of more than $250m. That means startups have to be less focused on ‘growth at all costs’ and rather prioritise developing the product, delivering a spotless customer service, and retainining the existing customer base. While investors are closing their wallets, consumers and business customers are still very eager for transformative technology that makes their lives better and easier.

Middle-class purchasing power 

With increased inflation, consumers will likely favour brands and payment providers that enable them to save. The focus will not be on convenience and speed of transaction but, because of a tightening purchasing power, will instead translate to an increased usage of various online payments and BNPL that enable consumers to save and plan large purchases, respectively. For instance, according to the latest survey McKinsey’s 2022 Digital Payments Consumer Survey, nearly nine in ten Americans are now using some form of digital payments, and they are engaging with these rapidly evolving solutions in an increasing variety of ways. In-app and peer-to-peer (P2P) purchases exhibit the greatest gains, in many cases building upon the existing use of online payments. More than two-thirds of Americans expect to have a digital wallet within two years, and will likely hold multiple wallets to exploit opportunities with little regard to brand loyalty. 

A greater engagement (and usage) of digital wallets means tremendous potential for marketing and purchases departments that will be in the spotlight more. A more robust engagement, likely correlated with a positive customer experience, will create a flywheel effect involving higher retention and more net new acquisitions (through word of mouth) that will keep wallets alive.

Internet "cleansing" era  

We are standing on the cusp of the Internet "cleansing" era after two decades during which enormous volumes of social and commercial activity have migrated online, giving rise to various harmful, risky, unethical and illegal phenomena. Regulators, consumers and the media are putting pressure on internet companies to ensure the integrity of platforms, the security of users and the reliability of transactions and interactions. Similarly, fraud, security, trust and privacy are increasingly becoming board-level topics for financial institutions, and budgets for compliance and brand reputation are growing.

Fintech vendors leveraging data and cloud automation rapidly become the new security standard-bearers in various verticals. There is a fundamental and radical improvement in the tools available to assess risk and fraud. Unfortunately, many large financial institutions, which are inherently slow to change but embrace innovation with curiosity, still operate with a more limited set of tools.

AI and Machine Learning become must-have

By 2023, AI and machine-learning algorithms in fintech that support transactions in banking, lending, and credit-risk assessment will definitely have a more significant impact on who gets access to financial services and to what extent. Over the past decade, fintech innovation has enabled 1.2 billion unbanked people to gain access to financial services, according to the World Bank. However, almost 3.5 billion people in the world are still excluded from the formal financial sector. Most of them are unbanked, meaning they aren’t able to acquire a bank account, forcing them to obtain credit through informal, and often very expensive, moneylenders or loan sharks. Therefore, the market for this area is substantial.

On the other hand, by leveraging AI technology to their advantage, banks can increase their revenues, provide a unique multichannel experience and accelerate innovation cycles. As the impact of Web3 technology becomes more apparent, the need for regulation will grow.

People always matter 

And the last-but-not-least trend, which is essentially evergreen and yet paradoxical as new technologies grow in importance, is the human factor. No matter how extensive the growth of AI, machine learning or metaverses may be, people are the very factor that propels your business forward or, conversely, will put it out of the game. That's why it's more important than ever to find your 'A' team and let them work. These people don't have to be Ivy League graduates or have super-high IQs. They have to understand business, fit in well with the culture you've created and be agents of change. 

Otherwise, horizontal networking is also crucial against an apparent crisis and the sluggishness of official institutions in the post-pandemic era. Being involved in a large community of entrepreneurs and founders means constantly learning and helping each other to build sustainable businesses.


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Peter Barcak

Peter Barcak

CEO & Co-Founder


Member since

17 Oct 2022



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