The Financial Future In The Coming Years

The previous two years served as a litmus test for all standard operating procedures and technical systems in the financial sector. It revealed inefficiencies and shortcomings, such as faulty digital account opening processes, inadequate back-office operations, and a lack of online client engagement tools.

We have all learnt our lessons and know who will come out on top. But, to be honest, this was just another crisis. More will arrive and depart. Nonetheless, banking will continue to be in high demand.

2022 Financial Trends: A Shift to Ecosystems

Source: Smart Insights

Banks and FinTechs now share equal screen real estate on consumers’ phones. However, everyone has a finite amount of mental capacity. When there are too many financial products, one of them must be eliminated. Or re-bundle with others, but on better terms.

Banks and FinTechs are well aware that they cannot compete in the market without each other’s assistance. The connected consumer experience has a high bar. Few people can get there quickly enough on their own.

Legacy technology and a lack of experience sometimes stymie agile finance in banks. On the contrary, FinTechs cannot make the regulatory engine move faster than it already does. Similarly, aggressive client acquisition and market expansion necessitate time and significant cash investments.

It is no longer a case of a bank versus FinTech or bank vs neobank. There are leaders at both ends of the spectrum and laggards attempting to catch up. The financial market has room for everyone, especially if all players band together and begin working in an equitable environment. 

Ecosystems will be an industry megatrend in the coming decade, serving as a springboard for subsequent developments. We already see some movement in that direction in 2022.

Technology Companies , Embedded Finance and Financial Services

Source: Rosenblatt Securities

Over 90% of multinational corporations have stated that they intend to extend their activity in business ecosystems. Many of them (not only GAFA) want to move to the banking sector.

Open Banking has lowered the barrier to obtaining financial services, and tech-driven businesses benefit from this. Furthermore, they already have a competitive advantage over traditional banks due to their user-friendly online experience.

This is a significant benefit because 81 percent of individuals believe the quality of their online banking experience influences who they bank with. All generations prefer a fantastic digital banking experience.

Innovation will emerge from sources other than traditional financial service companies in the coming decade. Companies entering the financial services sector for the first time will collaborate with established market players to develop embedded financial services or joint products.

Cryptocurrencies Bank Owned Land

Source : Malwarebytes Labs

In 2021, two hot topics were decentralised finance (DeFi) and non-fungible tokens (NFTs). But are these the remnants of previous blockchain hype or significant new financial sector trends? We believe in the second option.

Global banks have been looking for strategies to mitigate the influence of markets (and governments) on their operations for years. Finally, technology has caught up with the need, allowing banks to build private company ledgers and issue primary digital bank currency (CBDC).

A central digital bank currency is electronic cash provided by the bank that clients can use to conduct online payments and transfers.

The main difference between traditional and central digital bank currency is that any government agency will not supervise the latter. Instead, central banks will retain complete control of the money supply and more significant influence over monetary policy. Similarly, CBDC can ensure that people have constant access to central bank money as we carry less physical cash.

Buy Now, Pay Later (BNPL) and Point of Sale (POS) Loans

Source: TAMI

Buying now and paying later is not a novel concept. Consumer lending is a traditional banking service. So, why are companies like Klarna and Affirm growing by double digits?

Because they have used technology to make online financing faster and simpler. Customers do not need to contact an agent or register into an app to obtain a credit limit increase. Instead, customers are provided with the option to pay in instalments with a single click. Customers are hooked, and banks are taking notice.

Interestingly, many players prefer to collaborate with BNLP firms rather than compete with them. BNPL is a popular service that is eroding some loan revenues. However, it will not eliminate credit cards. For persons with thin credit files and little credit history, BNPL might be an affordable alternative source of borrowing.

However, as a result, BNPLs will need to become more careful in their customer screening. Currently, most players do not perform extensive KYC or credit checks. They also do not record their loans to credit bureaus.

As New CX pillars, Sustainability and Inclusion

Source : MDPI

Banks do not have as strong a brand as technology enterprises. Fewer consumers like or trust their banks to do the right thing. However, trust is a crucial reason customers prefer traditional banks over FinTech.

But, because we still need somewhere to put our money, we stick with at least one bank. On the other hand, consumers eagerly switch to less shady and more transparent IT and FinTech enterprises.

On the other hand, Banks are still working to regain the faith that was lost during the previous financial crisis and the recent hitches caused by the pandemic. To date, incumbents have tried a variety of approaches, including:

  • Introducing new items with names like Marcus, de-jargonizing marketing, and making the fine print bigger.
  • Adopting open banking standards to provide users with much-needed transparency.
  • Changing the organisational culture to improve capabilities and processes to keep client promises.

However, a more significant battle awaits: providing more excellent care to vulnerable consumers and creating an inclusive customer experience.

The Race to Create an End to End Ecosystem has Begun

Finance is no longer just the domain of financial institutions. More gamers will enter the space now that the entry barrier has been removed. Should you be concerned about your competitors?

Most likely, if you do not want to transition to systemic thinking. Ecosystems give all members the ability to earn more significant revenue with little more capital. Instead of developing a new product, you might integrate an existing offer from a partner or charge a fee for your services.

This allows you to generate additional cash and improve your customer experience. By providing a diverse set of embedded, interconnected services, you can meet customers’ demands at various periods of their lives.


Pirimid can help your company become more productive and profitable by developing cutting-edge software. AI, powerful TCA, and Data Visualization aren’t the only things you can use to predict bond prices. With R and Shiny, you can make a Banking Chatbot. Let us be your one-stop tech solution provider for your fintech projects! Book a call with us today!

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