Advances in blockchain, digital banking, and cloud computing are enabling the financial services industry to scale its services and transform its product offerings. That is why we give you a comprehensive view of the global Financial Tech trends for 2023 and beyond so that you do not miss out on how the industry is changing. Artificial intelligence (AI) is the most significant trend in the industry, and it is also impacting other financial tech trends like cybersecurity, digital banking, and WealthTech. The integration of blockchain in the financial ecosystem improves the data and transactional security as well as enables crypto transactions and decentralized finance (DeFi) architecture. Open banking also allows banks to monetize customer information and enables non-banking financial companies (NBFCs) to leverage this data. The Internet of Things (IoT), customer engagement solutions, quantum computing, and sustainable financing are the other significant trends impacting FinTech.
Innovation Map outlines the Top 10 Financial Tech Trends & 20 Promising Startups
For this in-depth research on the Top 10 Financial Tech Trends & Startups, we analyzed a sample of 2 709 global startups and scaleups. The result of this research is data-driven innovation intelligence that improves strategic decision-making by giving you an overview of emerging technologies & startups in the financial tech industry. These insights are derived by working with our Big Data & Artificial Intelligence-powered StartUs Insights Discovery Platform, covering 2 500 000+ startups & scaleups globally. As the world’s largest resource for data on emerging companies, the SaaS platform enables you to identify relevant startups, emerging technologies & future industry trends quickly & exhaustively.
In the Innovation Map below, you get an overview of the Top 10 Financial Tech Trends & Innovations that impact 2 709 companies worldwide. Moreover, the Financial Tech Innovation Map reveals 20 hand-picked startups, all working on emerging technologies that advance their field.
Top 10 Financial Tech Trends
- Artificial Intelligence
- Decentralized Finance
- Open Banking
- Digital Banks
- Customer Engagement
- Internet of Things
- Sustainable Finance
- Quantum Computing
Tree Map reveals the Impact of the Top 10 Financial Tech Trends
The Tree Map below illustrates the impact of the top 10 financial tech trends in 2023. Automation of manual tasks through robotic process automation (RPA) and AI-powered chatbots have high adoption rates in the finance sector. DeFi and open banking solutions democratize financial infrastructure and data. Since neobanks and digital banking services are on the rise, there is growing interests in financial cybersecurity solutions to prevent money laundering and cyber attacks. Additionally, the financial services industry is boosting customer engagement through voice-enabled services while IoT devices track customer data to further personalize services. Sustainable financing also impacts FinTech as customers are preferring banks that fund high-impact projects over traditional banks. On the other hand, quantum computing works to increase precision in market predictability and wealth management solutions now receive more market penetration.
Global Startup Heat Map covers 20 Financial Tech Startups & Scaleups
The Global Startup Heat Map below highlights the global distribution of the 2 709 exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals that western Europe and the US have a high concentration of financial tech startups.
Below, you get to meet 20 out of these 2 709 promising startups & scaleups as well as the solutions they develop. These 20 startups are hand-picked based on criteria such as founding year, location, funding raised, and more. Depending on your specific needs, your top picks might look entirely different.
Top 10 Financial Tech Trends for 2023
1. Artificial Intelligence
Financial institutions leverage AI and machine learning (ML) to automate repetitive and time-intensive tasks such as customer verification and screening. Besides, digitization of financial operations provides vast amounts of data for the AI models. Startups utilize this data to develop AI- and ML-powered solutions like financial chatbots and robotic advisors. This allows banks and non-banking financial companies to automate customer interaction and, in turn, improve their satisfaction. Other FinTech startups also offer autonomous finance in which there are no manual interventions. This significantly boosts customer experience and positively impacts conversion and repeat sales while freeing up employees and saving time. Lastly, such solutions offer insights into customer behavior, allowing financial institutions to personalize their products.
CREDmitra facilitates Loan Management
CREDmitra is an Indian startup that provides Software-as-a-Service (SaaS) solutions for loan management. The startup leverages AI-based data models and automation to optimize borrower onboarding, assessment, disbursal, and monitoring. This enables lenders to increase loan processing speeds, eliminate ineligible leads, mitigate frauds, and ensure timely loan repayment. The startup also offers a pay-as-you-use service model, allowing small and medium enterprises to automate loan management at low costs.
ChatCredi offers Finance Chatbots
ChatCredi is a Spanish startup that develops finance chatbots. The startup’s AI-integrated chatbots improve customer engagement and match user conversations with optimal finance products. These chatbots are also available as application programming interfaces (APIs), speeding up chatbot deployment. ChatCredi’s conversational AI thus enables financial institutions to reduce the time to credit decisions of their customers.
2. Decentralized Finance
Blockchain enables a decentralized finance ecosystem that offers more control to the users. DeFi utilizes smart contracts to replace centralized banking systems and moderate financial settlements. As a result, transactions become faster, enabling real-time cross-border payments. Moreover, blockchain-based ledgers increase transaction security. Cryptocurrencies are only a part of the DeFi architecture as startups are developing extended DeFi services. These include decentralized exchange (DeX) protocols, non-fungible tokens (NFTs), peer-to-peer (P2P) protocols, and Web3-ready infrastructure. They enable users to replace conventional banks with more democratic and secure digital protocols. At the same time, financial institutions utilize the blockchain to safeguard sensitive information. This improves their brand value and enhances customer trust.
Spherium Finance develops a Decentralized Wallet
Spherium Finance is a Singaporean startup that offers a decentralized wallet. It features cross-chain interoperability, thus streamlining multi-chain and multi-source assets management. The wallet enables users to swap tokens and receive rewards for using decentralized apps (DApps). This way, the solution provides the convenience of centralized infrastructure while ensuring high-speed, high-security transactions.
Cream Finance enables Decentralized Lending
Taiwanese startup Cream Finance provides a peer-to-peer decentralized lending platform. It leverages liquidity mining to lend crypto assets through its marketplace. Cream Finance also allows CREAM token owners to participate in governance and voting rights. The startup’s DeX protocol, Cream Swap, is permissionless, open-source, and blockchain-agnostic as well as an automated market maker (AMM). It thus automates token swapping and speeds up transactions while eliminating centralized components.
3. Open Banking
Even though the digitization of financial operations generates more data, it is inaccessible for NBFCs. Open banking bridges the gap between banks and third-party financial providers by delivering financial data through APIs. Some startups also offer banking-as-a-service using cloud-based solutions to speed up financial product development. These solutions enable financial tech companies to improve customer profiling and risk assessments. Moreover, customer financial data accessibility enables NBFCs to generate insights into their spending habits and create personalized financial products and services. Startups also offer open finance solutions that further the collaboration between third-party providers and traditionally closed financial companies.
Flaist offers FinTech-as-a-Service
Flaist is a US-based startup that provides FinTech-as-a-service. The startup’s platform combines conversational intelligence, personalization algorithms, and intention analysis to digitize customer interactions. It features financial aggregation, financial wellness, and open banking. This enables a consolidated personal finance portal for customers and allows them to aggregate financial data across multiple service providers. Besides, the platform enables banks and other financial institutions to speed up product development and, in turn, improve customer loyalty and retention.
Finverse Technologies simplifies Financial Data Access
Finverse Technologies is a Hong Kong-based startup that offers financial data with user consent. The startup’s API allows financial product developers to access customer account data with data encryption at rest and in transit. This enables businesses to improve financial management, monitor digital transactions, and track investment accounts.
4. Digital Banks
Changes in regulations and improvements in digital infrastructure is increasing the adoption of online banking services. COVID-19 significantly accelerated this transition and forced conventional banks to offer all of their products and services through online channels. Similarly, many financial tech startups emerged during the pandemic that leveraged open banking infrastructure and cloud-based services to deliver banking services. Since these digital-only banks save on capital expenses, they offer lower service charges for the customers. Besides, digital-only banks focus more on customer preferences and leverage customer-friendly processes, improving convenience.
Fingo Africa is a Youth-focused Neobank
Kenyan neobank Fingo Africa provides youth-focused banking. The startup’s smartphone app allows customers to pay utility bills, create savings goals, and earn rewards. It mitigates difficulties associated with opening bank accounts for teenagers and, in turn, improves their financial wellness and independence.
Green-Got is a Green Neobank
French neobank Green-Got funds social-impact projects for each payment made through its system. The startup funds projects such as renewable energy, sustainable agriculture, waste treatment, and forest protection, among others. Companies use Green-Got’s payment account to achieve sustainability goals. Additionally, the startup allows the companies to fund sustainable projects as well as track their CO2 impact.
The migration of financial operations into online channels makes banks and NBFCs even bigger targets for cyber attacks than before. In addition, the financial services industry deals with massive amounts of sensitive customer information, and data leaks lead to high legal expenses. This is why financial tech startups offer cybersecurity solutions tailored for financial institutions. For instance, startups provide automated data compliance, financial data encryption, role-based access control, biometric authentication, and network monitoring solutions. They enable network admins to monitor data access and network activities in real-time and mitigate cybersecurity risks. The FinTech industry is also leveraging quantum computing to ensure data integrity and security in the quantum era.
Data Sentinel provides Automated Financial Data Compliance
Data Sentinel is a Canadian startup that enables automated financial data compliance. The startup’s SaaS solution discovers, classifies, and quantifies financial data. It also offers data audit-as-a-service to identify sensitivity exposure and data quality. This enables financial and insurance businesses to comply with regulations and protect sensitive customer information. Consequently, the startup allows financial institutions to monetize customer data without compromising data security.
Sardine facilitates Financial Fraud Prevention
US-based startup Sardine offers financial fraud prevention for digital financial products. The startup’s platform filters and searches users by customer and device attributes as well as provides a summary of social profiles and geolocation. Financial companies integrate Sardine’s software development kit (SDK) to verify identities, receive behavior metrics, and monitor transactions for anti-money laundering (AML) compliance. This enables low-cost, scalable fraud prevention and compliance infrastructure.
6. Customer Engagement
Financial tech solutions are constantly improving services and products to improve customer engagement. Financial companies now utilize game elements and mechanics to simplify objective setting, progress monitoring, and reward customers. These gamification solutions encourage customers to increase savings, boost their financial literacy, and improve daily financial management. FinTech startups also provide voice-enabled services, including payments, to enhance customer experience. Additionally, banks integrate voice-to-text functionality in their chatbots to enable conversational banking, further improving service accessibility. Immersive technologies like augmented reality (AR) and virtual reality (VR) also enhance the customer banking experience by enabling virtual transactions.
Entroq Technologies enables Gamified Investment Learning
Entroq Technologies is an Indian startup that applies gamification to stocks and crypto investing. The startup’s smartphone app offers real-time, short finance and capital market news. It also provides investment recommendations from top stock brokers to facilitate decision-making. The app’s polls, quizzes, and tutorials enable contextual learning about financial topics and capital market investment. Moreover, it builds a community of financial literates and capital market enthusiasts, increasing user engagement.
INATIGO develops a Financial Assistant
UK-based startup INATIGO makes Finley Ai, an AI-powered financial and pension assistant. Users are able to access it as a Google Assistant action and ask general finance-related questions that are otherwise forwarded to financial advisors. Furthermore, the solution matches users with an advisor on-demand. INATIGO is also working on an Alexa-based integration of the same solution for improving access to financial information.
7. Internet of Things
Credit and debit cards already use wireless connectivity technologies such as radio frequency identification (RFID) and Bluetooth low energy (BLE) to enable cashless transactions. Further, startups develop IoT-powered wearables to facilitate cashless transactions while ensuring security. Other solutions utilize IoT to increase the security of financial transactions through real-time network monitoring and biometric authentication. Location monitoring, especially in mobile transactions, allows banks to identify suspicious activities and prevent fraud. Additionally, connected kiosks and point of sale (POS) systems also leverage IoT to monitor customer interactions and provide customer analytics to improve services.
LGR Global simplifies Supply Chain Financing
LGR Global is an Estonian startup that facilitates supply chain financing. The startup’s solution leverages IoT, data analytics, AI, and smart contracts to create digital twins of real-time supply chain conditions. This improves the transparency of supply chain operations and allows trading partners to upload digital documents. The platform then validates its content using smart contracts to identify discrepancies in trade finance processes. Besides, LSR Global’s solution enables instantaneous cross-border money movement and manages customer compliance risks.
UPPay offers an IoT-powered POS Machine
Brazilian startup UPPay develops an IoT-powered POS machine for unattended retailers. The device combines an RFID reader, mobile payments, and a touchless interface. UPPay also provides a companion smartphone app to configure its POS machines. Additionally, its web-based dashboard provides visibility into customer transactions, allowing operators to identify sales opportunities.
8. Sustainable Finance
To meet climate-friendly customer attitudes, companies are transitioning to sustainable operations and actively trying to offset their carbon emissions. Sustainable or green finance solutions aid this by providing opportunities for financial companies to fund sustainability projects. These include renewable energy projects, forestation activities, and low-carbon transport. Startups also incentivize businesses that manage their climate impacts and offer analytics tools to simplify carbon reporting. Green financing, thus, increases financial flows from the banking sector to power sustainable development.
ecolytiq provides Sustainable Finance Infrastructure
German startup ecolytiq offers sustainable finance infrastructure-as-a-service solutions. The startup’s solution uses proprietary financial data aggregation and analytics engines to calculate environmental impact. It also provides individual compensation and investment opportunities. This enables financial institutions to offer environmental footprinting for their customers and drive climate actions.
Bluecell Intelligence offers Sustainability-linked Loans
Singaporean startup Bluecell Intelligence provides green loans and sustainability-linked loans. The startup’s platform offers greater accessibility to sustainability financing for small- and medium-sized enterprises (SMEs). It allows companies to improve their sustainability profile and generate new revenue streams through green grants and lower interest rates. Funders utilize the startup’s platform to screen borrowers and facilitate impact reporting, enabling companies to achieve net-zero goals.
9. Quantum Computing
Financial institutions need high-performance hardware to process massive amounts of data. This is significant to offer real-time market prices and guarantee instantaneous transactions. Besides, quantum-resistant solutions are necessary to ensure the security of financial infrastructure as the technology becomes more accessible and practical. To tackle this, FinTech startups provide quantum computing-based solutions tailored for financial services. These include solutions to predict market movements, identify patterns in financial data, and improve risk profiling, among others. Further, quantum computing-based solutions augment AI and analytics. This enhances trading and asset management decisions, allowing fund managers to increase returns for their customers.
AbaQus facilitates Financial Risk Management
AbaQus is a Canadian startup that offers risk management solutions for financial services. The startup’s research platform leverages quantum computing-based machine learning to analyze and optimize finance strategies and offer financial forecasts. Moreover, AbaQus provides quantum readiness strategies based. This allows financial tech companies to classify and categorize complex datasets to predict trends more accurately than conventional ML techniques.
Arqanum Technologies builds a Quantum Computing-based Blockchain Network
Indian startup Arqanum Technologies develops a hybrid blockchain network. The startup’s network combines distributed quantum computing and classical computing to create a proprietary hashing algorithm. It runs on quantum processing units for faster transaction processing and makes them quantum-proof. The startup also offers quantum computing-based smart contracts to accelerate DApp development and decentralized autonomous organization (DAO) creation.
Increased accessibility to various investment vehicle data, such as stock market, crypto, and real estate, allows FinTech companies to improve wealth management. WealthTech startups further use analytics and AI to generate insights into market movements and empower trading decisions. Moreover, these solutions are available for both corporate and retail investors. Some startups leverage algorithmic trading to replicate investment decisions and portfolios of popular advisors and investors. This way, fund managers ensure best trading practices and provide higher returns for their customers.
21strategies enables AI-based Hedging
21strategies is a German startup that makes hedge21, an AI-based hedging platform. It leverages decision theory, data fusion, and AI to develop a situational picture of markets in real-time. Then hedge21 offers quantitative and systematic recommendations to smoothen earnings before interest and taxes (EBIT) for hedge funds. This allows investment managers to efficiently navigate markets and achieve better investment outcomes. And for corporate treasurers, hedge21 optimizes hedge decisions for foreign currency exposure.
Denim Social improves WealthTech Customer Relationship Management (CRM)
US-based startup Denim Social offers a CRM platform for financial advisors. It features publishing, advertising, and compliance tools to deliver, scale, and secure content. This enables wealth management brands to increase their social media presence and expand advisor networks. The platform also provides compliant, curated, and pre-approved content libraries to increase customer engagement. Besides, its built-in compliance processes enable them to protect its brand and reduce risks.
Discover all Financial Tech Trends, Technologies & Startups
The FinTech industry is moving towards autonomous finance by leveraging AI, smart contracts, and cryptocurrencies. Although cyber attacks are the most significant challenge to the industry, advances in quantum computing will ensure a smoother transition to a more secure financial infrastructure. Likewise, open finance will tackle the data gap between banks and NBFCs, benefitting customers with more personalized and affordable financial products. Moreover, the increasing interest in Web3 opens up a better opportunity for FinTech startups to advance DeFi and make it more accessible to users. All these solutions ultimately improve the overall productivity of financial operations as well as enhance customer financial wellness.
The Financial Tech Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation and startup scouting process. Among others, biometrics, immersive technologies, and open finance will transform the sector as we know it today. Identifying new opportunities and emerging technologies to implement into your business goes a long way in gaining a competitive advantage. Get in touch to easily and exhaustively scout startups, technologies & trends that matter to you!