The New Financial Landscape: Top Fintech Trends and Innovators 2023

The fintech industry is shaping up to be as exciting, lucrative, and possibly turbulent in 2023 as it has been in previous years.

Today, the global financial technology sector is worth about $132 billion and is projected to reach $324 billion by 2026. A staggering range of technologies, trends, and businesses are driving this rapid growth across the world, from newly-connected countries on the African continent to nascent virtual worlds like the metaverse.?

Recent advances have made buying, spending, banking, investing, and other financial activities unprecedentedly simpler, faster, and more accessible to consumers. In parallel, consumer trends are moving unambiguously in a direction that favors transparency and control.?

In a complex, rapidly evolving space like fintech, the first and most important strategy for organizations looking to capture new value is to know the market, the technology, and the key innovators who are driving digital change.?

Embedded finance goes mainstream?

Embedded finance refers to financial products and services incorporated into any organization’s suite of offerings, even organizations that are not committed financial providers. To take a well-known example, Uber – though not a financial firm – disrupted the traditionally cash-only ride-hailing market by embedding a simple, intuitive payment processor within its app. This hugely popular feature has since become the industry standard.

Many companies today are exploring embedded finance options as a way to improve customer experience and build new revenue streams without taking on the costs and regulatory issues associated with operating a chartered bank. By 2026, the embedded finance market is projected to facilitate $7 trillion in US transactions or about 10% of the country’s total transaction value. The sheer scale of these figures indicates that the future of payments will be determined primarily by financial innovations coming from non-financial companies and integrated into non-financial products.

Higher levels of financial inclusion

One of the fintech revolution’s greatest triumphs to date has been its ability to deliver key financial services to previously unbanked populations in less developed areas of the globe like Africa and the Asia-Pacific region. Over the past decade, a flux of new hyper-efficient, transparent fintech platforms have helped many societies better allocate public resources and fight corruption, as well as provide banking access to more than one billion new customers.

Between 2020 and 2021, Africa’s startup scene exploded in size, with thousands of new fintech companies emerging throughout the continent to provide services for the unbanked and underbanked. Experts predict that total financial services revenues in Africa will grow by 10% yearly until 2025, with fintechs claiming an increasing share of the rewards.

Despite these successes, an estimated 1.7 billion people remain unbanked today – a huge untapped market for digital players looking to integrate more financial services customers into the global economy.

Greater buy now, pay later adoption

Buy now, pay later (BNPL), is an innovative form of installment loan that allows consumers to divide purchases into multiple, often interest-free, payments. Rising startups like Klarna and Afterpay have introduced millions of customers to the value of BNPL, while Apple has offered the service to its global user base through cutting-edge zero-interest payment plans on products like Apple Card.

Roughly 360 million people around the world currently use BNPL services, a figure that’s expected to more than double in the next five years. A recent survey shows that while 60% of people have used BNPL in some form, 66% have expressed concern that the service may be too risky.” For firms looking to break into the space, this widespread fear of adoption presents an opportunity to communicate the benefits of BNPL in a more persuasive fashion.

Blockchain technology is here to stay

Since Bitcoin’s creation in 2009, the cryptocurrency market has developed a reputation for volatility and uncertainty that the ongoing FTX scandal will do little to mitigate. However, the distributed ledger technology upon which Bitcoin and other crypto tokens are built has a range of financial applications beyond facilitating the buying and selling of digital assets.

With the rise of decentralized finance, or DeFi, we are beginning to see the full potential of the blockchain as it applies to business- and consumer-driven financial activity. The core aim of the network of platforms and blockchain projects comprising the DeFi economy is to provide a viable alternative to the traditional financial system by helping people earn, spend, and do business without relying on established intermediaries.

Advances in blockchain latency and throughput, along with the strengthening of security around cross-border transactions, are helping the fledgling space achieve legitimacy and attract new users looking for non-traditional financial tools and opportunities.

The metaverse rises

Meta CEO Mark Zuckerberg has called it the “next chapter of the Internet”, but exactly how the metaverse will affect the financial services industry specifically is difficult to say at this early stage in the network’s development.?

As the chief builder and custodian of the metaverse, Meta’s own ambitions for how financial transactions will occur on the network are worth considering. In an in-depth article, the company claims metaverse creators are “already looking to new types of digital assets to give them more control over their work, their relationship with their fans, and an ability to monetize both.” In May 2022, the company also announced its first range of “digital collectibles” for showcasing NFTs.?

Top innovators to watch in 2023

Slope - BNPL software

Region served: US

Category: Buy now, pay later

Website: https://www.slope.so/

Founded in 2021, Slope is an early-stage Bay Area startup that allows small businesses to offer flexible payment options at checkout, including BNPL services. By marketing to companies rather than individuals, the firm has established a thriving niche within the broader BNPL space. Slope uses emerging fintech tools to fulfill its mission of removing access barriers to capital for small and medium-sized businesses.

The company has raised a total of $157.1 million in funding across four rounds, most recently in October 2022.

Stitch - Payments processing in Africa

Offering South African users a range of API-led financial services, Stitch is emblematic of the new wave of ambitious African startups. In its own words, the company helps other businesses “easily develop more user-friendly, innovative and inclusive digital finance products, at lower costs and without fraud.”?

In 2021, the company raised $4 million, the largest funding round raised by any African API fintech startup, and has gone on to establish a global client base that includes heavy-hitters like Binance and Flexclub.?

Region served: International

Category: Financial services

Website: https://stitch.money/

Ellevest – Wealth management for women

New York-based Ellevest is an investing platform tailored for modern women. The company offers female investors a suite of educational resources, professional financial advice, and boasts a distinctive investing algorithm tailored to womens’ life experiences (and longer life expectancies). With no advisory costs and low monthly fees, the platform aims to be as inclusive as possible, regardless of where customers are on their investing journey.

Ellevest has raised more than $153 million to date, including from many female-led funds across the United States.?

Region served: US

Category: Wealth management

Website: https://www.ellevest.com/

mmob – Embedded finance solutions

Region served: UK

Category: Embedded finance

Website: https://www.mmob.com/

London-based mmob is “on a mission to make embedded finance technology accessible.” Using the company’s sleek, intuitive platform, financial services providers can build personalized solutions for clients with little to no code.?

Founded in 2020 by financial professional Irfan Khan, mmob’s close ties to the traditional banking industry, coupled with its novel status as the UK’s first embedded finance firm, have allowed it to grow rapidly across the country. The company has so far raised $6.6 million over two rounds?

Ledger – Crypto hardware startup

Region served: Europe

Category: Crypto hardware

Website: https://www.ledger.com/

Founded in Paris in 2014, Ledger provides highly secure hardware wallets for crypto owners. These wallets add an additional layer of security to easily hackable devices like computers and smartphones. The startup’s suite of products and bets, inspired by Apple’s designs, range from elegant nano wallet devices to a NFT marketplace for brands and artists.

The company has seen considerable growth since launch, raising $468 million in funding and establishing itself as a critical provider of secure solutions for blockchain applications in Europe.

How U+ can help you capitalize on emerging fintech technologies and technologies

U+ is a leading global corporate venture-builder that helps companies develop, launch, and scale profitable new businesses, including in the fintech sector. We have successfully built multiple fintech products and businesses, including a robotic investment advisory and several peer-to-peer trading platforms for use in the European market.?

Our international team focuses on everything from product development to commercialization, technology to design. To date, we have brought 100+ successful businesses to market, creating over $2 billion in value for our clients.?