2022 Informed: Four key fintech predictions

2022 will see the rise in online-only banks and buy now pay later purchase journeys, while AI will feature heavily in credit management and banking apps – although sometimes, to avoid filling out a million online forms, customers will continue to demand humans-over-the-phone-as-service

1: Global ascendance of the neobank

“One of the biggest trends of 2021 was the increased pressure placed on legacy financial institutions from digital disruptors. The rise of neobanks  [banks that are 100% digital, using apps and online platforms to support customers rather than physical branches] in Europe was particularly noteworthy, with many companies benefitting from the EU’s progressive approach to financial regulation.  

“The advantages of neobanks will continue to prove appealing in 2022. In fact, there are already some commentators who believe that 88 percent of all banking transactions will be conducted via a smartphone by the end of next year. It’s highly likely that regions like the US will also begin to see greater adoption rates. “

Pawel Oltuszy, CEO and founder, Frost

2: Predictive analytics will play a key role in credit management

“With the pandemic’s impact set to keep rippling through consumers’ personal finances next year, advanced predictive analytics will play a crucial part of credit and arrears management strategies. 

“Working on both macro and micro levels, AI will continue to find patterns in complex data and pick up trigger points across consumers’ financial behaviour – spotting credit problems before they arise.

“With algorithmic trust growing across business, financial advisors will look to AI to predict exactly which accounts and clients may need monthly interest and loan repayment support. 

“This trend will continue well beyond 2022, as digitising the credit space becomes increasingly important. Data-driven tech will supersede traditional linear business models when it comes to supporting today’s growing gig economy. We are set to see financial institutions become one-to-one support networks, using data to build tailored experiences for every single customer.” 

Matthijs Aler, CEO of Ohpen

3: Continued automation in banking creates human paradox

“For certain financial processes such as insurance and some investment propositions, robo-advisors and background automation are set to become more prominent across the board. 

“Across other complex products such as mortgages, robots are unlikely to replace humans any time soon – however, the hybrid balance is set to shift significantly. Across origination and underwriting processes, robo-advisors will increasingly pull together the data across these functions at speed.

“This will certainly push human consultation further towards the end of processes, yet paradoxically get the customer to reach it much quicker, sparing them of dozens of online forms in the process. Friendly, professional advice will forever remain the most vital link in the financial chain, yet this move from 50/50 robo-human to 75/25 will better leverage the power of human analysis, locking in consumer confidence from start to finish.”

Matthijs Aler, CEO of Ohpen

4: The year of Buy Now, Pay Later (BNPL)

“Paying in digital installments, often without added fees, is forecast to be worth $995bn in 2026. For merchants, the benefits are vast. It boosts sales and drives conversion rates by 20-30%, attracting consumers with more flexible payment options. It tends to increase basket value, trust and loyalty too.

“Successful start-ups and incumbents are increasingly offering this solution to appeal to Millennials and Generation Z consumers, who are used to more flexible digital payment methods. The growing popularity of BNPL means that businesses that do not provide this option risk having a significant portion of their potential customers go elsewhere. To gain an advantage in 2022, the entire purchase journey should be adapted.” Robert Hoffmann, CEO of Merchant Services, Nets