The current year has been difficult for consumers and companies on many fronts. From the extended COVID-19 outbreak to the unexpected crypto market meltdown, enterprises throughout the globe have had to react to the new trends in finance continually.

FinTech trends and industries are evolving with market developments to fulfill worldwide regulatory standards and client needs. In 2023, powerful technical innovations will continue to shake up the industry, enabling it to enhance customer experiences, strengthen business propositions, and raise income.

This is the current list of the current trends in finance (in 2022). And those that are expected to increase indefinitely until 2023.

We’ll also talk about the companies, changes in consumer behavior, and technology trends in financial services or breakthroughs driving each emerging trend in finance.

The Future-Oriented Statement of Operations was developed by government goals and Statistics Canada’s (the agency’s) intentions as outlined in the 2022-23 Departmental Plan.

Forecasted results for the fiscal year 2021-22 are based on actual results as of October 31, 2021, and predictions for the rest of the fiscal year. Forecasts have been prepared for the fiscal year 2022-23 outcomes.

10 Finance Trends to Watch in 2023

1. Payment Advancements

Fintech payment innovations include a variety of components. Mobile payments, contactless payments, mobile wallets, smart speaker systems, identity verification technologies, AI, and machine learning are examples of security technology.

According to estimates, the most significant development in payment innovations is the increase in mobile payments, particularly during the COVID-19 epidemic, when more transactions went online (PaymentsJournal, 2020). Mobile payments, however, do not just cover internet purchases. In-store transactions are expected to exceed 2.7 billion by 2022, bringing the total value of global eCommerce transactions to more than $5.4 trillion by 2025. (Payvision, 2020).

2. Cloud-Native Systems

Leading financial institutions use cloud-native systems. In 2020, HSBC inked a long-term arrangement with Amazon Web Services to migrate old services to the cloud. Deutsche Bank and Google created a cloud-native “fully-managed environment for apps.”

Why is the cloud crucial? IBM said cloud-based technologies boost agility, save IT and operational costs, and let distant workers remain productive.

3. AI/ML

AI and ML improve business efficiency. These tools quickly sift, analyze, and acquire massive datasets. Instead of manually sorting data, financial organizations may act on these findings.

IDC expects that by 2026, 85% of organizations will utilize AI and ML to improve foresight, increasing productivity by 25%. Low-code/no-code AI lets non-coders develop apps. Gartner predicted that “low-code tools would make up 65% of all app development by 2024,” while Forrester predicted that low-code/no-code industry investment would reach $21 billion by 2022.

4. Blockchain

Digital currencies have become such an unmistakable trend in the financial industry that the Bank of Canada is contemplating introducing a digital loonie. These plans, however, will only be implemented if one or more private cryptocurrencies become broadly accepted in Canada. The transition to a fully digital economy will almost certainly impact all corporate operations, particularly payment processing systems and other financial services.

5. Green Finance

Business worldwide prioritizes sustainability. Green finance, which examines the relationship between the environment and money, is rising in popularity.

Responsible investment (RI), environmental, social, and governance (ESG), sustainable finance, and climate finance are related words.

Green finance recognizes that environmental stability is essential to economic growth and that current financial policy must minimize the environmental effect.

6. Embedded Finance

According to the Q4 2021 Embedded Finance Survey, the Canadian Embedded Finance business is anticipated to expand 42.5% year on year to US$4,700.8 million in 2022.

The embedded finance industry is predicted to rise steadily during the projection period at a CAGR of 25.2%. The country’s embedded finance income will rise from $4,700.8 million in 2022 to $15,878.2 million by 2029, making it one of the most popular recent trends in financial services.

7. Increase in Canada’s Stock Market

All Canadian stock indexes are down year-to-date. Stock prices have fluctuated due to high inflation and central bank rate rises.

Good news? Canadian investors should benefit next year. Analysts expect US markets to remain turbulent through 2023, while Canadian markets are hopeful. Some experts predict the Toronto Stock Exchange will reach a record high in 2023 due to rising commodity and energy prices and outperform the US.

There will still be volatility, particularly in a recession. However, Canada’s benchmark index, the S&P/TSX composite, is heavier on financial and oil sectors than the S&P 500.

8. Peer-to-Peer Lending

Multi-service fintech firms provide peer-to-peer (P2P) financing, democratizing loans by creating efficient digital platforms that link lenders and borrowers. This trend is likely to continue in 2023 as leading Canadian P2P lenders such as Lending Loop, GoPeer, and Reddit (r/borrow) transform the financial landscape.

9. Hyperlocal Finance

Hyperlocal financial services are also growing. Rural community banks offer financial services. Urbanization may also increase hyperlocal service demand in cities.

This resource is vital to local development in emerging economies. 1.7 billion people need more financial services.

10. RegTech

RegTech “facilitates the delivery of regulatory obligations more efficiently and effectively than current capabilities,” helping the sector overcome its toughest obstacles. (FCA).

Fintech businesses risk rising compliance expenses and possibly large penalties due to growing regulatory complexity. RegTech is growing as fintech companies need compliance solutions.

Bottom Line

The “new normal” might become completely visible in 2023. There will be chances to shape the future, one in which profits and purpose are closely connected. Financial services trends may be poised and ready to bring the industry forward.

After reading this blog, we hope you understand the Canadian government’s present position in the financial industry trends. However, it’s best to consult with professionals like GJM & Co. if you want to learn more and comprehend the details. Our accountants and specialists will lead you through the possibilities in sustainable finance trends and explain how they might affect your organization.

Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.in.