In 2021, big trends like digital-only banking and the growing popularity of mobile wallets transformed the fintech (finance technology) industry. To start 2022, we decided to take a closer look at the most important trends and developments in the industry.
After analysing them in more detail, we picked out the 5 biggest fintech trends to watch out for in 2022 – and cover how they are going to impact the industry.
1. Peer-to-Peer (P2P) fintechs take over for good.
Fintechs servicing the growing market for peer-to-peer-finance (services like lending or borrowing) have grown in market dominance in recent years. Marketing research firm Forrester predicts that in 2022, banks will admit defeat in competing with dominating P2P-fintechs and instead change their strategy to partnerships and consortium ventures with leading fintechs in the P2P finance space.
2. Banks enter the blossoming ‘Buy Now, Pay Later”(BNPL)-industry.
The usage of buy now, pay later (BNPL) services has grown from around 4.07bn USD in 2020 to over 4.95bn USD in 2021, being particularly popular with Millennials and Gen Zers. Already in 2020, it was projected that the industry would show a compound annual growth rate (CAGR) between 2021 and 2028 of 22.4 %. In fact, BNPL services are mainly used as an alternative to traditional credit or debit cards.
A November 2021 survey by marketing research firm Insider Intelligence showed for US consumers, that two of the main reasons to use BNPL services is to avoid paying credit card interest (39,4 %) and making purchases that otherwise don’t fit the person’s budget (38.4 %). In 2021, Amazon and ÚS-retail giant Walmart have added BNPL options as methods of payment.
Banks can no longer afford to sleep on the BNPL trend. As marketing research firm Forrester predicts, in 2022, banks are seeking to introduce their own solutions or acquire existing BNPL providers. Currently, the BNPL market is dominated by Affirm, Afterpay, Klarna and PayPal. The increased boom of BNPL services also brings about increased scrutiny by regulators such as the SEC in the United States.
3. The rise of “Super Apps” (one-stop-shops).
Many experts and industry reports predict for 2022 a race for the creation of a “super app for banking”. The concept of the “super app” refers to a single app within which users can use features such as payments, banking, communication, shopping for groceries and everyday necessities, enjoy entertainment and more.
While “super apps” are well-established in Asia (Wechat in China, Grab in South-East Asia), in the Western world consumers are currently plagued and bombarded by choice overload. A 2021 survey by Deloitte found that 1 in 3 consumers feel overwhelmed by the necessity to manage multiple devices and subscriptions. A survey by fintech think tank PYMNTS.com found that 67 % of users express desire for a single super app to organize and complete their digital activities.
When willsuperapps emerge in the US and Europe? Many indications show that 2022 could bring the rise of super-apps in the West. PayPal announced last February that it will develop a mobile app that lets users shop directly from retailers and merchants. Our very own eCredits eWallet App can also be seen as a super app: It allows users to shop directly with local retailers and merchants, manage loyalty rewards or send ECS directly to other users.
4. Wealthtech transforms wealth management advisory.
Wealthtech is the subsegment of fintech that is concerned with technology transforming wealth advisory and wealth management. Artificial Intelligence allows for automated, highly customized wealth advisory – at much cheaper costs than traditional wealth advisors. Meanwhile, users can access wealth advisory from anywhere using their smartphone and often benefit from a much better customer experience. In 2022, wealthtech adoption will continue to grow and go way beyond the infamous and ever-more-powerful “RoboAdvisor”:
Wealthtech solutions provided in the form of mobile apps harness the power of algorithms and contextual information to offer users investment options that take their risk appetite, preferences, portfolio constellation and current market scenarios and standards into account. With a few taps on their smartphone, users can conveniently navigate their investment portfolios, and run what-if-analyses or scenario simulations to better qualify their investment decisions.
5. Increased adoption of user-friendly mobile point of sale (MPoS) technology.
mPOS stands for “Mobile Point of Sale”, the term being applied to mobile devices like a smartphone or tablet that works wirelessly with a cash register or a conventional EC terminal. mPOS devices are used by merchants who need to accept payments on the go.
In 2022, the adoption of mPOS systems will continue to grow. mPOS systems like eCredits allow retailers and merchants to make use of additional features such discounts, transactions without presenting a card, and employee accounts. They are also highly secure, which is more important than ever in today’s business world.
mPOS devices don’t tie you to a single, fixed location. They help improve the customer experience by not only offering multiple payment options, but also speeding up service and wait times. mPOS solutions are especially appealing to small business owners who don’t want to invest large sums in their POS system.