Trends and Predictions for the world of payments in 2023: North America Edition

What do the next 12 months look like for the banking and payments space? We’re looking retrospectively at what happened in 2022 and what the future will hold in 2023 across our global regions. In this blog, Keith Riddle – CEO of BankiFi Americas – will highlight his predictions for the US payments space in 2023, as well as what he found to be trending in the past year. 

What have been the major Fintech trends you’ve seen in the last 12 months? 

The rise of Non-bank payment service providers. 

• Non-bank payment service providers, such as Stripe, Square and PayPal, present a significant competitive threat to financial institutions and their current or potential SMB relationships and relationship primacy  due to simplifying the onboarding process and enabling a unified digital experience to compliment back-end payment processing services.  The non-bank providers are also impacting deposit acquisition within the SMB space. 

Ecosystem expansion of fintech providers. 

• For example, QuickBooks, GoDaddy and Business network have all expanded into payments facilitators within the last 12 months. Square has become a leading lender to SMB’s and Amazon have expanded their cash advance solution. All of these are presenting real challenges for FI’s to create a mutually profitable relationship with their SMB customers. 

A long Cryptocurrency “winter”. 

• The issues encountered through the demise of FTX will drive future regulatory oversight, which will fundamentally alter the cryptocurrency market going forward. 

What are your fintech predictions for 2023? 

Open frameworks and API enabled ecosystems will continue to gain market tractions with purpose built digital experiences. 

• Financial institutions should embrace open frameworks and API  technology and partner with the appropriate solutions provider who could enable a suite of integrated workflows with their digital banking platform. By doing so, the FIs provide their SMB customers such a tailored user experience and embedded operational efficiencies, resulting in an opportunity to rival the non-bank payments providers. 

Open Banking will grow in 2023. 

• According to a recent study issued by Research and Markets, Open Banking is projected to grow at a compound annual growth rate of 24.4% from 2019 – 2026.  The study also noted the industry could grow even faster if Fintech and Bank participants were to win the trust of a significant  customer base.  However, from a trust perspective, data sharing rules need to be standardized within each region to facilitate a significant global shift to open banking. 

Digital communication as a primary method of interaction for retail and business customers looking for financial guidance will be an impactful trend. 

• Financial institutions will seek proven digital communication platforms that comply with regulatory requirements and begin to offer the flexibility for both retail, SMB and larger business customers to communicate within diverse digital channels – such as digital banking, email or SMS. 

Advancements within the financial inclusion space will be achieved. 

• With the advances of predictable analytics and API-based platforms to support their integrated services, financial institutions will be in the position to capture and analyse a broad spectrum of data for expanded access to financial services, and piece together an appropriate portfolio of services to meet unique consumer and business needs. 
• More specifically, consumable data analytics services, which are driven by coupling open API frameworks and predictive analytics functionality, will provide the FIs and SMBs with data in a usable format for initiating insights, personalized offers, and future lending underwriting requests.   

Away from banking, what changes do you hope to see in the industry in 2023? 

I hope there is a progressive perspective that emerges with respect to business models designed to transform the convergence of data, personalized experiences for the financial institution’s customer base, and open frameworks.    

The giant techs continue to stretch the boundaries of the possible with respect to complex AI algorithms and embedded services and are succeeding in the delivery of unified and simplified digital experiences.   

From a banking perspective, the unified digital experiences from non-financial providers create the next experience expectation from the financial services community.   

Book a meeting with Keith in 2023 

If you found Keith’s retrospective of 2022 and predictions for this coming year insightful, particularly in respect to his anticipation for an embedded banking trend in 2023, you can book a meeting with him below to discuss our embedded banking solutions here at BankiFi and how our digital solutions can create a unified digital banking experience for small business banking customers in North America.