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Finch Capital’s annual FinTech predictions for 2022
Finch Capital released today their 2022 predictions for European FinTech (visit prediction report here). This prediction combines industry data from various research institutes and databases. It also includes the Finch team’s own perspectives on the market, proprietary insights and data based on a decade of investment experience in European FinTech. The following trends are our predictions for 2022.
PSPs: Fight for your share and margin – Processing margins in decline, value added services will define winners. The ability to market other products and win customers is key for survival as the competition intensifies and payments processing becomes more commodityized.
The mainstream adoption of Crypto/DeFi – Corporates start to adopt Crypto & DeFi, paving the way for global adoption. CVCs show increased interest in investing capital into the sector, which adds an extra stamp of approval to make it mainstream.
Consumers find sustainable apps that scale – Consumer cash surplus and interest at all-time high. Sustainable investment apps will be scaled if there is a dramatic increase in the sustainable funds flows and peaking household savings rates.
Buy Now Pay Later replaces credit cards – In 3 to 5 Years, the battle for market share is going to be real. This shift will be driven by the new generations, who overtake the baby boomers in consumer expenditure and continue to penetrate BNPL.
Embedded Insurance Roll – One of the super apps in Europe will crack an embedded insurance product, biggest potential with Money Management apps. To meet the growth, it is important to further develop the insurance API ecosystem.
Back to Basics for Artificial Intelligence – AI took a big hit last year, it’s time to re-focus on basic AI and keep it simple. The majority of value lies in traditional AI and analysis and doesn’t focus on niche financial functions. Both time it takes to implement and the time it takes for value creation are uncertain.
The ‘home-journey’ redefined – PropTech will begin covering all aspects of the transaction chain, from front to finish. While the previous waves have helped shape some elements of the value-chain, the next wave will focus on supporting customers throughout digital transformation.
AI-enabled debt collection software – fastest growing use case in Financial Services. E-commerce is increasingly funded with debt. Therefore, there are more efficient collection procedures with new consumers both within retailers and agencies.
End-to-end KYC and identity management are the new fad – As financial crime gets complicated, KYC solutions that only focus on simple ID checks will get left behind. The industry’s biggest concern is continuous monitoring, which can be complex and requires constant attention.
The next great thing is the payroll train – The open banking war is over with payroll rails becoming the next infrastructure play. The financial products providers will have better insights into the consumer through payroll APIs. This allows them to provide actionable information and not just monitor (bank APIs). Imagine a lender reducing its interest rate on the basis of ”writing” its deduction into the payroll and thereby almost eliminating non-payment.
BaaS M&A – A big bank, payments or software vendor will buy a BaaS company focused on payments to enter the vertical.
“2021 was another great year for European FinTech. In 2022, we anticipate being more bold on several fronts. These include mainstreaming some of the trends that defined the last five years, such as Crypto and DEFI. To a more polarized landscape, NeoBanks will also be present.”
Radboud Vlaar, Managing Partner Finch Capital
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Disclaimer: Fusion MediaThis website does not provide accurate and current data. CFDs are stocks, indexes or futures. The prices of Forex and CFDs are not supplied by exchanges. They are instead provided by market makers. As such, the prices might not reflect market values and could be incorrect. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.
Fusion MediaFusion Media and anyone associated with it will not assume any responsibility for losses or damages arising from the use of this information. This includes data including charts and buy/sell signal signals. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.
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