Trends in Fintech in 2023

The fintech market in India has seen significant growth, driven by trends like virtual bank cards, biometrics, Buy Now, Pay Later 2.0, proptech, stablecoins, capital market digitalization, AI and ML for financial technologies, gamification, and regtech. These trends offer increased convenience, security, and efficiency for both consumers and businesses.


Growth of Fintech

The fintech market in India is anticipated to expand at a CAGR of above 10%.

The COVID-19 pandemic has had a favorable effect on India’s entire fintech business. The government-imposed lockdowns and limitations on cross-country travel were mostly to blame for this. During 2020 and 2021, the dependence on e-commerce, online payment methods, and other things increased significantly. The trend also persisted into 2021 and 2022 as consumers realized how much simpler online money management is than traditional techniques.


Here are 9 key fintech trends that you need to watch out for in 2023.

9 Trends in Fintech in 2023 to look out for


  • Virtual bank cards:


Virtual bank cards are the cards that live in a user’s phone and not the wallet. They can easily be issued from both neobanks (online banks) as well as traditional banking institutions. 

These cards can be used both in-store and for online purchases with the added advantage of being secured from credit/debit card fraud. Since all the transactions take place from the user’s bank app, the compromised virtual card can be replaced in a few seconds and very conveniently.

Many banks are also offering “disposable” virtual cards that change their details after every purchase making them more secure and reducing the risk of fraud for the customer.


  • Biometrics:


There are a lot of biometric processes that are being used by Fintech companies, they are:

  • Fingerprints
  • Retina Scans
  • Voice Patterns
  • Facial Recognition

These make it easier for users to authorize payments in a hassle-free and quick manner. These should however be used in combination to provide additional security. These methods are, however, more secure than only using passwords. Given the high level of security they provide, biometrics will be the most sought-after trend in 2023.   


  • Buy Now, Pay Later 2.0:


Buy Now, Pay Later is one of the most attractive trends as it allows consumers to pay for the product while they are using it. This leads to higher sales volume as well as improves customer loyalty. 

The only issue is that customers are spending money that they don’t necessarily have, nor is there a way to verify the recovery of the money. This can lead to added bad debts for the company. 

Buy Now, Pay Later 2.0 will include not only fintech but also merchants, big tech, card networks, etc. that will follow the legacy consumer credit products, increasing transparency of interest rates and late fees. 


  • Proptech: 


Proptech or Property Technology is the use of Information technology by individuals and companies to buy, sell, and manage real estate. It reduces the time and effort to apply for mortgages, get approvals, and increase the efficiency of the repayment, all this while following the regulatory requirements. 

This is a relatively new sector in the Indian market, however, because of the ease that it brings, it is gaining a lot of popularity. 


  • Stablecoins: The new breed of cryptocurrency


A stablecoin is a type of cryptocurrency in which the value of the digital asset is intended to be correlated to another cryptocurrency, exchange-traded commodities, or fiat currency as the reference asset.

These coins offer benefits like reduced volatility compared to other cryptocurrencies, making them suitable for everyday transactions and as a store of value. They can facilitate seamless cross-border transactions, provide a hedge against market fluctuations, and enable faster settlements in the financial and blockchain ecosystems. 


  • Capital market digitalization: 


The stock exchange is very dependent on political factors, however, Capital Market Digitalization helps counter these issues. It prioritizes shareholder well-being over political necessities. 

Digitization will embrace data and analytics as integral parts of capital management and keep a healthier distance from politically-sensitive matters. This will present an opportunity for strong-willed entrepreneurs who are willing to explore this fintech trend.


  • AI and ML for financial technologies:


The utilization of chatbots for customer service has become a very popular trend that helps reduce the workload for the customer support department. 

AI in financial services also helps reduce fraud and is also heavily used for risk management. Since the pandemic hit, fraud cases have seen a high rise as the E-Commerce industry has boomed. Using ML algorithms to analyze various factors makes it easy to detect fraudsters before they can completely hurt the individual.  


  • Gamification:


Gamification in finance involves applying game-like elements, such as rewards, challenges, and interactive features, to financial activities and services. This approach aims to enhance user engagement, educate users about financial concepts, and encourage positive behaviors, like saving and investing. For instance, a finance app might use gamification by offering badges for achieving savings goals or simulating investment scenarios to teach users about stock markets. By integrating game mechanics into financial tasks, gamification aims to make financial management more enjoyable and accessible while driving better financial decision-making.


  • Regtech:


Regulatory Technology is all about automating regulatory compliances that help companies cut big costs. The main functions include monitoring, reporting, and compliance. 

Regtech lowers the risk to a company’s compliance team by providing information on money laundering activities carried out online—activities that a traditional compliance team may not be aware of due to the growth of underground marketplaces online.

Shubhra Nainthani