The fintech industry is home to exciting innovations, and investors can learn a lot from watching up-and-coming fintech trends. Keeping an eye on new trends may help inform your investing choices and help you build long-term wealth. Here are just some of the fintech happenings to keep on your radar as you look for new investment opportunities in 2023.
Banking as a Service
Banking as a Service, also referred to as embedded finance offerings, give consumers access to a wide range of financial services outside of standard checking and savings accounts. You may already be familiar with some companies that have implemented Banking as a Service, such as PayPal and Venmo, but even companies that don’t operate in the fintech world have begun using this fintech trend.
So what is Banking as a Service? It’s a system that allows companies that aren’t banks to roll out unique financial products. Examples of this might include retailers that offer pay-in-four services at checkout or travel booking companies with built-in financing options to pay for vacation packages. In both cases, we see non-banks providing customers with options traditionally offered by banks. In essence, Banking as a Service brings fintech functionality to all sectors of business. This fintech trend is projected to be worth as much as $11.34 billion by the year 2030 as the trend grows over the next decade.
As crypto currency and blockchains become more accepted in the financial world, the fintech industry has paved the way in providing access to crypto-linked cards and payment services. Visa reported $2.5 billion in payments made via its crypto-based credit card in the first quarter of 2022 alone. The benefit of these cards for consumers is the ability to withdraw cash from ATMs and make payments to retailers without having to convert their cryptocurrency first. Crypto debit and credit cards also offer some of the rewards you might already have with your traditional banking and credit card accounts, such as loyalty rewards and points.
This is all potentially good news for individuals investing in both cryptocurrency and the banks operating the crypto cards, though it is important to note the volatility of the crypto markets, especially in light of recent developments within that market. Both account balances and reward values may fluctuate wildly, depending on the crypto markets, and money held in crypto accounts is not FDIC-insured in the same way U.S. currency is.
AI is also used in real estate to help monitor and predict market trends, analyze data, and provide insight into potential investments. REITs can take advantage of AI to identify market trends and inform their decisions when adding assets to a portfolio. Individuals looking to buy a home can use AI to find a mortgage at their ideal rates, and real estate agents can even use the technology to predict when properties might be ready to go on the market. Artificial intelligence is becoming essential for the fintech industry, especially when addressing real-time data tracking, and its use may continue to rise over the coming years.
Fintech trends can be exciting to watch, but they also provide plenty of opportunities for investments, whether you’re looking at purchasing stock in companies using Banking as a Service or you want to use AI to manage your investments and help you begin investing in real estate. Click here to learn more about DiversyFund and its place in the fintech world.