What Does 2023 Have in Store for Banks and Fintechs?

Each new year starts with a set of resolutions, goals, and predictions. According to a recent Gallup poll, the majority of Americans predict negative outcomes in 2023 for a host of economic, political, societal, and international issues. Our own research showed that 40% of U.S. consumers surveyed believe their current financial situation has changed for the worse due to rising costs compared to last year. 

So what does this mean for the finance and fintech industry? Here’s a round-up of six 2023 predictions from across the ecosystem:

1. Improvement of Digital Banking Experiences

According to Jim Marous, co-publisher of The Financial Brand, CEO of the Digital Banking Report, and host of the Banking Transformed podcast, the banking industry is at the crossroads of digital transformation opportunities and the challenges of an uncertain economic reality.

He highlights new research from Q2 that shows the priority for 2023 was the improvement of digital banking experiences through the elimination of friction during the customer journey. Financial institutions and fintechs have a tremendous opportunity to drive better customer outcomes and move the needle towards financial strength.

2. Embedded Finance Will Fully Embed

Fintech Magazine predicts embedded finance will really take root next year. “Both B2B and B2C businesses will be looking for ways to embed banking and financial services directly into their user experience.” Jeff Winner, CEO of Happy Money, adds that embedded financial services will be an expectation. He expects to see more solutions for consumer lending with widespread adoption of embedded finance and advancements in digital banking. Rex Salisbury, a founder of Cambrian, also sees embedded or vertical SaaS as a huge growth area for 2023. 

3. “Boring” Opportunities Will Rule the Day 

Victoria Treyger at TechCrunch reports that the opportunities for fintechs in 2023 lie in the “boring” areas like fraud, compliance, payment operations, taxes and infrastructure. “CFOs will be more focused than ever on bottom-line impact. Fintechs that are able to demonstrate a measurable improvement in payment authorization and reconciliation rates or a reduction in fraud will be able to weather the downturn and grow.”

4. Open Banking Adoption Rises

Linas Beliūnas shared his top predictions for fintechs and top banking trends to watch in 2023 (paid subscribers only for this second one). Both articles point to Open Banking and Open Finance as important trends. For fintechs, he predicts that “as more financial institutions open up their data and functionality through APIs, we’ll see more fintech firms building innovative products and services on top of an open banking infrastructure.” 

5. Banking-as-a-Service Will Say Goodbye 

Timothy Li at Crowdfund Insider highlights 10 fintech predictions, including the end of the era of “rent-a-charter.” He says that most rent-a-charter banks are no longer taking new fintech partners, and BaaS solutions built on these banks are frantically trying to find other bank partners to service. However, there are no other banks that want to stick their necks out right now. There will also be mass casualty with fintechs that use their bank partners to lend and issue credit cards.

6. The Anti-Prediction

On the flip side, Ron Shevlin, Chief Research Officer at Cornerstone Advisors, predicts he will hate most 2023 predictions. Whether you like predictions or not, 2023 is another year to create better money experiences for consumers. 

At MX, we're starting the year with new research into what consumers really want from financial providers to guide 2023 priorities. Join us for one of our upcoming webinars to learn which digital and mobile features consumers are searching for from financial institutions and fintechs.

What Consumers Want from Financial Institutions: Join Jane Barratt, Chief Commercial Officer, Financial Institutions, and Crystal Anderson, Vice President of Product, on January 17 at 9:00 a.m. PT. 

Your Fintech Roadmap for 2023: Come hear from Brett Allred, Chief Commercial Officer, Fintechs, and Crystal Anderson, Vice President of Product, on January 18 at 9:00 a.m. PT.