The past few years have shown that digital banking platforms are more suited to meet the requirements of 21st-century consumers, rather than traditional physical branch locations.
These Fintech trends are expected to continue developing during 2023, with many more users expected to turn to digital banking solutions to manage their finances.
Starling Bank’s Record Profits in the UK
In the United Kingdom, virtual banking services have also become quite popular.
UK’s Starling Bank expects to more than quadruple its pre-tax profits in its Annual Results for the year ending 31 March 2023.
As of the end of December 2022, total deposits stood at a substantial £10.7 billion.
German Blockchain Businesses on the Rise
In other notable Fintech-related developments from Europe, Crowdfund Insider reported that Germany accounts for 6% of European blockchain/DLT funding. CV VC published an inaugural German Blockchain Report following its newest and fourth ecosystem hub opening, CV Labs Berlin.
The report provides a structural overview of Europe‘s top-ranked blockchain country, and its publication highlights CV VC’s commitment “to building sustainable and connected global ecosystems since 2016.”
Digital Identity/Onboarding Now a Critical Part of Online Platforms
As noted in the report, German blockchain businesses have raised $217 million across 20 deals YTD (as of November 2022), 90% to Berlin Infrastructure and Defi received 55% and 27% of all funding, respectively.
Remarkable utility achievements are “found in digital identity and data protection for many industrial and service industries.” Indeed, digital identity solutions are increasingly being adopted as governments realize their benefits, according to another new report.
Driven by vaccination certificates, the need for identity checks in financial services, and the potential of the metaverse, governments across the world are acknowledging the benefits and the importance of digital identity, enabling the technology to really take off in 2023 and beyond, says GlobalData, a data and analytics company.
While digital identity / ID verification is not purely a Fintech trend, these types of digital onboarding services are critical and complementary to the safe and mass adoption of all-digital financial services.
It’s now the responsibility of service providers as well as tech-savvy businesses to ensure that their digital onboarding solutions are secure and user-friendly, in order to meet the growing demand for digital banking solutions.
Many more options available for investors
As we look ahead to 2023 and beyond, it’s becoming clear that modern consumers are looking for ways to make their financial services and overall online experience as smooth as possible.
A big part of this includes becoming more active as an investor, and there are now many options that aim to democratize access to lending and investment services. Companies and platforms like Bondora, Robo.cash, EstateGuru, October, Mintos, and Debitum are just a few examples of those that are focusing on this area.
Fintech is no longer just a buzzword in 2023, as the fundamental value proposition of seamless financial services, enabled by innovative Fintech solutions, cannot be understated. Despite some hype and unrealistic company valuations that have come crashing down in the past year, we can expect to see many more large investment rounds this year, many more mega-rounds ($100M or more), and even a lot more Fintech Unicorns.
According to an update from Pitchbook, venture capitalists invested a record $41.0 billion into the retail fintech vertical in 2021, representing a 78.6% increase compared to 2019’s $23.0 billion. The banking and credit and Wealthtech segments led this surge.
Neobanks Now Have Over 200M Customers
Pitchbook’s report also highlighted the growing popularity of neobanks, also referred to as digital banks or challenger banks, among consumers.
The report estimates that neobanks have over 200 million customers worldwide. Unlike traditional retail banks, neobanks do not operate physical branches and offer banking services through websites or apps, often resulting in financial services that are more convenient, faster, and more accessible.
These agile neobanking/Fintech platforms can continue to attract more funding in 2023, as they provide a more viable and accessible option for individuals and businesses.
“Unlike incumbent retail banks, neobanks do not operate physical branches and thus offer banking services through websites or apps. Often, this results in financial services that are more convenient, faster, and more accessible than those provided by traditional banks,” says Pitchbook.