As we approach the end of 2022, it’s an excellent time to take a step back and reflect on the financial services industry and its direction.
Over the past year, we’ve seen significant changes and developments shaping how we manage our money and make financial decisions.
In this blog post, we’ll look at some of the industry’s key trends and challenges and consider what the future may hold for the financial services sector.
The financial services industry is a diverse sector that includes many businesses and organizations providing financial services and products to individuals, companies, and governments. These services include banking, investing, insurance, and payment processing.
These days, financial services companies often use advanced technology to manage their operations and provide online and mobile services to their customers. In recent years, the financial services industry has undergone significant changes with the rise of digital technologies and the increasing importance of financial technology (fintech) companies.
The coronavirus pandemic also significantly impacted the industry, with many companies shifting to remote services and adopting new technologies to adapt to changing customer needs and preferences.
Remote financial management and outsourcing are becoming increasingly popular in the financial services industry as they offer a range of benefits, including access to a broader pool of expertise, reduced overhead costs, and improved efficiency.
According to Fortunly, as of 2022, 71% of financial service executives engage in outsourcing or offshoring.
By working with remote finance experts, organizations can gain access to a broader range of skills and experience than they could afford in-house. This can be particularly valuable for smaller organizations that may not have the resources to hire and retain a full-time finance team.
Outsourcing finance tasks can also help organizations to reduce their overhead costs. For example, organisations can avoid the costs associated with hiring, training, and retaining in-house finance staff by partnering with a remote finance provider. This can be particularly valuable for organizations that must manage their finances on a tight budget.
Remote finance models and outsourcing can also help organizations to improve their efficiency. By working with experienced finance professionals, organizations can streamline their processes and reduce the time and effort required to manage their finances. This can help organizations to focus on their core activities and achieve their strategic objectives.
As we’ve already covered the financial services industry’s current state, let’s look at what we should expect in the upcoming year.
Take a look at a few trends we should expect to boom in 2023.
Artificial Intelligence
The following year, we expect the financial industry to continue adopting AI solutions to reduce operating costs and improve services. This adoption is driven by AI’s success in automating complex processes and supporting infrastructure decisions.
In 2023, the use of AI in financial software development will become even more critical, as it will play a more prominent role in determining who has access to financial services and how.
A recent survey by Deloitte found that 86% of financial services AI adopters believe that adopting this technology will be critical to their business’s success.
SaaS platforms
SaaS solutions have entirely transformed traditional software licensing models by delivering software applications through the internet, making it easier for businesses to manage software and hardware.
Based on the studies, it is anticipated that the SaaS industry will grow at an annual rate of 18%, reaching a total of $623 billion.
SaaS platforms are expected to provide better customer experiences and faster product delivery, resulting in increased customer satisfaction.
In 2023, we expect to see an increase in low-code or no-code solutions, white-labelled SaaS, and micro-SaaS products.
Embedded finance
Embedded finance refers to integrating financial services into other products or services. This allows companies to offer a complete customer journey, increasing customer satisfaction and revenue.
One form of embedded finance gaining popularity is buy now pay later (BNPL), which allows customers to purchase products and pay for them in instalments. This payment option is becoming increasingly popular among consumers, and we are only likely to see this trend increase in the coming years.
According to Forbes, the amount of transactions worldwide made with the BPNL option is expected to increase from $120 billion in 2021 to $576 billion by 2026.
In 2023, the financial services industry will continue to evolve and adapt to the changing landscape of the global economy.
With new technologies and regulatory frameworks emerging, financial institutions must stay vigilant and proactive to maintain their competitive edge.
Despite the challenges, the industry remains a vital part of the global economy, providing essential services that help individuals and businesses manage their money and plan for the future.