5 Tech Trends in Finance That Will Take Over in 2022

We are nearing the end of 2021 and ready to welcome 2022. Just like any other year, your business might have experienced its share of ups and downs. At present, we are seeing a lot of businesses turn to tech solutions to revamp their core processes and enhance their productivity. 

The finance sector has readily embraced new technologies. However, in comparison to some other industries, the adoption rate has been relatively slower. This does not mean why we cannot introspect the new tech trends in finance that could take over in 2022. 

SEE ALSO: 5 Marketing Automation Tools to Watch Out in 2022

Tech trends in the financial services industry

1. Hyper automation

As organizations continue to aim for agility and reduce errors caused by manual tasks, hyper-automation has become increasingly popular. According to Analytics Insights, 34% of companies are turning to hyper-automation to boost their employee productivity [1]. 

Besides, the digital revolution coupled with an emphasis on growth has presented a strong case for automation. 

Hyper-automation is an approach that involves identifying, verifying, and automating business and IT processes. It requires a host of enterprise-grade platforms, such as no-code platforms, process mining tools, and robotic process automation (RPA). 

Hyper-automation is an extension of business process automation beyond the realms of individual processes. By integrating artificial intelligence-driven tools with RPA, you can automate recurring and mundane repetitive business tasks. 

As bizarre as it may sound, hyper-automation also automates automation. How? It identifies business processes dynamically and creates bots to automate them. 

At present, machine learning, artificial intelligence, and RPA tools are working together in sync to automate complicated business processes. 

There are many automation and financial reporting tools that can help financial institutions streamline their operations. 

2. DeFi

Blockchain technology background in gradient blue

Unless you are living under a rock, you may have heard about decentralized finance. At present, decentralized finance enjoys a 5% share in the crypto market [2]. 

A range of applications and tools that operate in a blockchain network is at the core of decentralized finance. Besides, these tools are also allowing users to use a wide range of traditional financial services without the interference of a central institution. 

Fintech Poland suggests that Defi has an immense potential to grow in the upcoming years. According to Fintech Poland, DeFi’s market capitalization has reached a whopping $200 billion from $3 billion in less than a year. 

Besides this, many believe that Defi is sitting on a gold mine due to tons of unexplored opportunities in the crypto-asset market. Currently, there are around 330 million crypto-asset users across the globe and the total value of Ethereum transactions crossed $2.5 trillion in the second quarter of 2021. [3] 

While there is considerable uncertainty around the Defi space, it is one of the most exciting and fastest-growing branches of modern finance. As decentralized finance gains popularity, it is tipped to shake the foundations on which the traditional financial institutions are based. 

3. Buy-now-pay-later (BNPL) 

The rise of online shopping coupled with the influx of a new generation of internet users has led to the adoption of new payment options. For instance, BNPL platforms such as Klarna and Afterpay were unheard of a couple of decades ago. 

However, tapping onto the current consumer behavior and digitalization, an array of BNPL companies have emerged in recent years. These companies in many ways are revolutionizing online shopping. 

Although credit card companies, loans, and other mediums for installment payments exist, BNPL adds a modern twist to it. How?

Unlike credit cards that are designed to be used repetitively, BNPL solutions are restricted to individual transactions. This approach has a higher appeal among consumers who are not willing to make long-term financial commitments. 

The arrival of the pandemic has fueled the growth of BNPL and as per projections, the industry is expected to cross the $680 billion mark in terms of transaction volume in 2025 [4]. 

4. Cross-platform services

Digital financial transactions cross into different industries such as healthcare, utilities, and retail to name a few. The rise of third-party payment solutions such as AliPay and PayPal can be primarily attributed to this trend. 

Today, consumers are looking for solutions and platforms that facilitate accelerated money transfer. Consumers are turning their back to lengthier and time-consuming back and forth between business sites and banking applications. This is why third-party service providers are foraying into digital spaces such as e-commerce. 

When businesses embed payment services such as hybrid wallets and mobile payment options for cross-platform transactions, they are likely to have more control over their finances. 

 The growing popularity of Payment Mini Program Integrations is a testament to the claim made earlier. Numerous financial vendors have increased their revenue outside of intra fintech and interbank transfers – a trend that will continue with digitalization in the financial sector. 

5. Cloud banking

Hologram projector screen with cloud system technology

The banking industry has not shied away from integrating new technologies to streamline its operations. Data is arguably one of the most sensitive components of banking. This is why the world’s most trusted cloud solution providers are handling such activities for banking institutions. 

The past few years have seen the pendulum swing in favor of cloud solutions as they continue to replace on-site infrastructure. We predict this is an inevitable direction for tech development in the banking industry.

When cloud solutions replace traditional data storage alternatives, it reduces additional expenses on data storage and archiving. One of the biggest barriers involved in the large-scale adoption of the cloud is the interface between traditional solutions and technologies. 

Parting words

The arrival of new technologies is expected to change the face of the financial industry in the upcoming years. As more and more financial institutions lean on tech innovations to rise through the competition, we are likely to see a whole new world of finance in the upcoming years. 

As cloud computing takes center stage in many industries, it is just a matter of time it takes over the financial world. 

SEE ALSO: 5 Benefits of an Accounting Software for Small Businesses

Feature Image Source: rawpixel.com

Image 1 Source: rawpixel.com

Image 2 Source: rawpixel.com

Sources:

[1] Hewitt. J (2021) “14 Stats on Hyperautomation: But What Do These Numbers Mean?” SalientProcess [online] Available from: https://blog.salientprocess.com/blog/14-stats-on-hyperautomation-digital-labor-rpa [accessed December 2021]

[2] Zhang. N (2021) “How decentralized finance works, and why it’s taking on Wall Street” CNBC [online] Available from: https://www.cnbc.com/2021/09/17/how-decentralized-finance-works-and-why-its-taking-on-wall-street.html [accessed December 2021]

[3] [4] Dutkiewicz. N (2021) “5 Financial Industry trends in 2022” BOSFintech [online] Available from: https://bosfintech.com/5-financial-industry-trends-in-2022/ [accessed December 2021]

 

 

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency.  At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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