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Top 7 Fintech Trends of 2022

These are seven key trends we see in fintech in 2022. The most important trend to pay attention to is the increasing regulation of the industry.


These are seven key trends we are seeing in fintech in 2022. Probably the most important trend is number seven as it has the biggest potential impact on the industry and your product.

 

 

Full Transcript Below:

Cody:

I have seen up to eight-factor security.

Cris:

What kind of ideas do you have when you hear biometric security?

Cody:

And pretty much anything that's unique about a person is seeming to be measured at this point. Don't make a new wheel unless you can make a really good wheel. Yeah.

Cris:

Yeah. All right. Cody, we get to talk through some FinTech trends. Oh boy. And so what this is, I think, is going to accomplish for us is just talking through what's big in the space and then things that we've touched on in the past to some degree or level. Because ultimately I'd love to see someone who's kind of looking to either break into FinTech, or expand more within the space, to hopefully work with us, which would be great.

Cody:

Yeah, of course.

Biometric Security

Cris:

What kind of ideas do you have when you hear biometric security?

Cody:

Oh, there's a lot. I have seen some wild stuff out there. I have seen, because we've obviously all heard of two factor security, right?

Cris:

Yup.

Cody:

That's a really common thing. I have seen up to eight-factor security before. And things kind of get a little wild when you go crazy. Because crypto people are very concerned about their security. There's a lot of bad actors out there that are trying to always get people's wallets, and all the other coins and stuff they have inside it. But when it comes down to biometric security, there's all kinds of different factors. There's obviously things as simple as SMS, just messaging with a little token, and all that. There is the kind of newer one, which is the, I think it's called TOTP. It's when you like scan a code, and it has an authenticator app, and you can basically have it mathematically generated-

Cris:

Okay.

Cody:

... to know what that code is supposed to be, real similar to SMS. And then there's other things when it comes down to biometric security. Of the facial recognition, iris scanning, facial depth recognition, which is what Face ID on Apple uses. And fingerprint, and there's all kinds of stuff out there. There's a lot of different, and pretty much anything that's unique about a person is seeming to be measured at this point. And I think that there's a lot of big trends on just, not only does it increase the user's accessibility to the program because you don't have to remember these giant crazy passwords.

Cris:

Yeah. Yep.

Cody:

But you also get to just make it more secure because people tend to forget passwords, so they use ones that aren't very good.

Digital Wallets

Cris:

Digital wallets, obviously these have been around forever. It's a huge part of FinTech. Yeah. I mean what can we expand on there without being obviously redundant?

Cody:

Yeah. So the nice thing is that at least digital wallets often tie into biometric security because that's usually what you use to actually get into one of them. A good example would be the Apple Wallet. Of course, Face ID being a part of that. But there's even, beyond the ones that are within phones, or I think there's even some applications within certain banking apps that allow to add other cards as well. There are crypto digital wallets as well, which are becoming increasingly more common, which rely even more heavily on the previous topic of biometric security.

Cody:

And overall, I would say that it's definitely a pretty large trend of just having an application that has some sort of secure digital wallet. And then usually there's a lot of opportunity for partnerships for companies that offer a digital wallet with other third party payment providers and things of that sort. But I would say that right now, there's definitely some really big players. So making a digital wallet, unless there's a really good use case, is kind of like one of those things that you only want to play if you got a lot of extra, a lot of power behind you, you could say.

Cris:

Yeah. Otherwise there's a lot of great providers, go work with them.

Cody:

Yeah.

Cris:

Yeah.

Cody:

Okay.

Cris:

It's one of those ones where it's like, don't roll it. Don't make a new wheel unless you can make a really good wheel. Yeah.

Cris:

I like it.

Cody:

Yeah.

Internet of Things

Cris:

What is IOT?

Cody:

IOT is interesting. It is definitely something that extends beyond FinTech, but it is also a big part of FinTech.

Cris:

What does it stand for? For those maybe not know.

Cody:

[inaudible 00:03:50]. It's about the most generic thing you can may ever imagine. It is the internet of things.

Cris:

Of things.

Cody:

So it's basically saying anything that is connected to the internet. Obviously that does not have anything to do in its nature with FinTech. It just happens to be that FinTech has found a home there as well.

Cris:

Okay.

Cody:

And a part of that is that things need to be bought, payments need to be provided, often in the physical space, and having devices that are connected to the internet to authenticate payments and things of that sort are becoming increasingly more common to be just part of your phone or part of a physical device. Or like a good example would be like Amazon's store that I've never been to, but the one where it's like-

Cris:

Yeah, yeah, yeah, yeah.

Cody:

... where you, the physical one where you there's no cashiers or anything, you just walk in and grab stuff and leave. A lot of those kind of experiences are powered by the internet of things.

Robotic Process Automation

Cris:

Let's expand on that point. You said it there, you talked about automation or even like robotic process automation type stuff.

Cody:

Yeah.

Cris:

Let's expand on that a little bit.

Cody:

Yeah. And that's a big part of it, is that in the old school world, all payments eventually ended up being on a paper ledger that was written.

Cris:

Yep. Yeah.

Cody:

Or printed. Yeah.

Cris:

I love that credit card thing. I miss that.

Cody:

Yeah.

Cris:

We should bring it back.

Cody:

Yeah.

Cris:

Highly insecure. But I still think we should bring it back.

Cody:

Yes. And as we've gotten more and more digital, as a civilization, payments are one of the first things. They're like, "Wow, we can really do a lot more processing a lot more quickly and a lot more cheaply by automating this as much as possible." And that is becoming more and more commonplace. Not only with obviously the banking system, but also within individual businesses as well. That's where a lot of it seems to be going right now, from everything from actual mortgages to car loans, to stuff like that. People want to make sure that they're lending to someone who's qualified to actually do so. And process automation for that is becoming really big. But I think overall that's a big part of it. But a big part of process automation is clearly going toward trust right now. And the world of trust doesn't need to exist in blockchain.

Blockchain

Cris:

Yeah. Our next topic. Very nice. Yes.

Cody:

Yes.

Cris:

No, totally. Yeah. It's kind of hard to talk FinTech and not talk blockchain.

Cody:

Yeah.

Cris:

Which depending on when people are watching this video, I'm always going to be interested to see like, how is blockchain? How is crypto doing? How are we actually utilizing the blockchain? But there's just so many possibilities, I think, out there for allowing people to create these much more unique and different systems to actually manage their financial futures.

Cody:

Yeah.

Cris:

And so there is so much openness to it, and I'm excited for that, but also it's a big, big space.

Cody:

On the surface level, it is a solution looking for problems at the moment. And financially, especially in today's economy, there's clearly some problems right now with the economics of blockchain cryptocurrencies. But I do think, at least at the moment, we're currently kind of in an exhale before they inhale again type moment. I don't think we're in the big bubble bursts or anything, at the moment.

Cris:

Right.

Cody:

But I do think that that is a huge topic. It is obviously a lot of room for growth. A lot of room for investment. People are always interested in that next big thing. And blockchain has hung around as that next big thing for a long time. And I don't think it's going away.

Cris:

No. Well, I think it's proven itself enough because it has seen a lot of these like valleys and peaks, and it's ridden those waves, and it's shown that it isn't, as you said, just something that's out there doing nothing. It really is a solution that can fulfill some problems and is continuing to look for those problems to solve.

Neobanks

Cris:

Banking, when you're talking FinTech and stuff, I think one of the big things that I've noticed a lot as of late is what I would call like neobanks, and the idea that you don't actually really have physical banking locations anymore because we've adopted such an environment of online banking. I go to the website. I do all my banking there. I don't physically need to go into a branch anymore. Yeah. How does that kind of fit into things and how do you see that trend continuing moving forward?

Cody:

Well, I think it's interesting because it lowers a lot of the overhead of traditional banking. A lot of the time, whenever I see these neobanks that don't have physical branch locations, one of the things they're offering is typically higher interest rates. Because I think that some of the savings they're making by not having physical employees and tellers and things of that sort, and all the expense associated with having a physical presence anywhere, is that they're returning some of that to customers to make it a more equitable option.

Cody:

You obviously lose some of the, I guess, customer service part of that, as part of a neobank, depending... And depending on what you value that may matter or not. But I see that a lot. And I also even see that with traditional banks. Big players, Wells Fargo, Citibank, Chase, they're all reducing their physical presence because us dang millennials like to bank with our apps. And I think that's going to be a trend that continues. I wouldn't be surprised if some major old school banks eventually go all the way, and go neobank themself, and they just don't have physical locations. But we're not there yet.

Cris:

We're not there yet. But we're getting closer.

Cody:

Yeah.

Regulation

Cris:

Regulations.

Cody:

Regulation is trying to adapt as quickly as it can. And there is a lot of gravity toward both keeping the status quo in certain industries and also needing to change it entirely. So the answer is regulation is kind of scary for a lot of people who are, especially in the financial space, especially for crypto, especially for some of the other things I mentioned, it's coming and I think it's what good to be prepared. And also I think that in a lot of ways, I guess one of the adages is if you are in a gold rush, you should probably start selling pickaxes. There's going to be business opportunities during this regulation, regulatory, I guess, translations of sorts. And I think being prepared for that is going to be very important.

Cris:

Yeah. This is not an industry, FinTech is not an industry where you want to jump in and... Not that you should ever jump in any vertical and kind of sit back on your laurels a little bit, but you know, there are much more established business verticals. I do not think FinTech, as all these things we've talked about, is one of those. And you need to keep an eye on the regulations. You need to be prepared and know that there are so many opportunities to pivot, depending on where stuff goes, which is good. And can obviously be a very big financial boom for you. But if you're not careful, you might start creating a system that now is regulated in a very bad way for you.

Cody:

Yeah. Yeah. Yeah. I mean, it's always possible to be swept out of the system simply by not paying attention to the regulations. And then all of a sudden you are, your business is now illegal. You know, it can happen. I think that you just got to keep tabs. That's a big, important part. And I think there's both money to be made and things to change over time.

Alexandra:

Thank you for joining us for this episode of Bixly Tech Tuesday. I hope you enjoyed that conversation between Cris and Cody, as they ran through a bunch of different trends that we're seeing in the FinTech space. If you have any questions at all, go ahead and leave them in the comment section and we'll get right back to you. And don't forget to check out the description box down below. We have a bunch of really helpful links in there, including a link to our free custom software guide, which walks you all the way through the process of developing your own app idea and getting it ready for development. You can also check us out at bixly.com. And right at the top, there's a button that says start my roadmap. And that gets you a free 60-minute call with Cris to talk about your next app idea. Until next time, this has been an episode of Bixly Tech Tuesday.

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