Top 5 Financial Trends Transforming the Industry Landscape

The financial trend landscape is evolving rapidly, driven by technological advancements and shifting consumer demands. These new trends in finance are reshaping the operations of financial institutions and redefining customer expectations.

In this blog, we’ll highlight the top five financial market trends that are shaping the future of finance and transforming the industry.

Growing Interest in Embedded Finance

Embedded finance is all about integrating financial services like banking, payments, lending, or insurance directly into non-financial platforms. This integration allows users to access these services without ever leaving the app or website they’re already using. As a result, the experience becomes more convenient and seamless.

Imagine you’re shopping online and need a loan. Instead of visiting a bank and completing tedious paperwork to get a loan, consumers can apply for credit directly while shopping on an e-commerce platform, all without ever leaving the website.

Another example in this financial trend is embedded payments. Your credit card details are securely stored within the platform, so you don’t have to enter them every time you make a purchase. It’s all about making transactions smoother and more efficient.

According to the “Embedded Finance Market Outlook” report by Future Market Insights, the embedded finance market, valued at $63.2 billion in 2023. It is projected to soar to over $291.3 billion by 2033. This remarkable growth is driven by the increasing demand for seamless digital interactions and the rapid adoption of innovative financial services.

Moreover, as highlighted in the Emarketer report “Consumers Spend More with Digital Wallets,” digital wallets have become one of the most popular embedded finance tools. Over 49% of Americans have used a digital wallet. Additionally, usage among Gen Z rises to 80%, showing a significant generational shift toward this convenient payment method.

Besides, the “Generate More Customer Spend with Embedded Financial Services” report from Bond, a fintech software infrastructure company, found that one-third of consumers using a brand’s embedded financial services tend to spend more with that brand. Furthermore, 30% of these customers now prefer that brand over its competitors.

Regtech Solutions Provide Accuracy and Efficiency

Regulatory technology, or Regtech, plays a critical role in helping financial institutions manage the growing complexities of compliance. By automating tasks and streamlining processes, Regtech ensures that companies can keep up with evolving regulations while reducing risk and human error.

As regulatory demands grow, especially in areas like data protection and anti-money laundering (AML) laws, financial institutions are turning to Regtech solutions to stay compliant. These tools help businesses save time and cut costs. They also lower the risks of non-compliance and enhance accuracy.

With Regtech, financial institutions can focus on innovation and growth without the constant worry of regulatory requirements. This not only boosts efficiency but also fosters greater trust and transparency within the financial ecosystem

The potential for growth in the Regtech sector is immense. According to Juniper Research’s “Regtech Market Size Report,” the industry is predicted to expand by 200% by 2026. This rapid growth underscores the increasing reliance on technology to manage compliance in a constantly evolving regulatory landscape.

For many financial institutions, investing in Regtech is driven by the potential for significant cost savings. The “Global Regulatory Outlook 2021” by Kroll reveals that over 30% of financial institutions spend more than 5% of their revenue on compliance efforts.

A powerful example of Regtech’s impact can be seen with Australian banks ING and CommBank, as highlighted in Ascent’s customer story. Previously, these banks manually mapped their regulatory obligations, a process that took around 1,800 hours of labor. However, after partnering with Ascent, an AI-powered regulatory knowledge platform, they reduced that process to just 2.5 minutes.

Robotic Process Automation Takes Over Mundane Tasks

Robotic Process Automation (RPA) is one of the key financial trends transforming back-office operations. It handles repetitive and time-consuming tasks like data entry, transaction processing, and reporting.

With RPA handling routine tasks, financial institutions can operate more efficiently and cut costs. This technology also gives employees the freedom to focus on more strategic and customer-oriented work.

Given these benefits, it’s no surprise that the RPA market is projected to grow at a compound annual growth rate (CAGR) of 38.2% by 2030, according to Grand View Research’s “Robotic Process Automation Market Trends” report.

A real-world example of RPA’s impact is Patelco, a credit union based in San Francisco, , as highlighted in Automation Anywhere’s customer story. Patelco implemented RPA to automate parts of its consumer lending, fraud prevention, and contact center operations. The results were impressive. Specifically, Patelco saw an 88% reduction in processing time, a 62% improvement in operational efficiency. They saved $39,000 annually by automating fraud alerts.

Fintech Companies Offer Finance Solutions Along With Green Initiatives

As awareness of environmental issues grows, more consumers are looking for companies that share their values. Fintech’s increasing focus on sustainability is attracting eco-conscious customers, and opening up new business opportunities while also making a positive environmental impact.

These green initiatives include offering “green loans” to support environmentally friendly projects and creating digital platforms that help users track and reduce their carbon footprints.

Around the world, green fintech initiatives are on the rise, with notable activity in countries like Switzerland, Spain, Singapore, and Sweden.

A notable player in this space is Stripe, a leading name in the financial industry. In particular, their Stripe Climate program supports green initiatives by enabling businesses to dedicate a share of their revenue to carbon-removal projects through Stripe’s payment processing software. Stripe states that tens of thousands of businesses have joined this effort.

Financial Institutions Embrace AI

Artificial Intelligence (AI) is revolutionizing how financial institutions operate, leading to advancements in fraud detection, risk management, customer service, and personalized financial advice. By utilizing AI, these companies can make more informed decisions, enhance their efficiency, and provide superior services.

The rise of AI-powered chatbots and virtual assistants is making customer support more accessible. As a result, financial institutions can offer assistance 24/7 and resolve questions promptly. Furthermore, AI algorithms enable them to analyze extensive datasets, resulting in more accurate risk evaluations and better predictions.

According to OpenText, a digital transformation company, 80% of financial institutions recognize the benefits AI can bring to their operations. Over 60% believe AI will become mainstream in the industry within the next two years. About 45% have already adopted some form of AI technology.

The impact of AI on cost savings is also significant. In particular, an Autonomous NEXT report on Augmented Finance and Machine Intelligence suggests that AI could reduce operating costs in the financial services industry by 22% by 2030. This reduction could translate to an estimated $1 trillion in savings.

AI is also transforming customer interactions. Accenture reports that banks using AI can see a 2 to 5 times increase in the number of customer interactions and transactions. This improved speed and efficiency benefits both banks and customers, making AI a game-changer for the future of finance.

DNBC Embraces The Latest Financial Trends

DNBC is proud to be a trusted global money transfer service provider for both personal and business needs. We’re also committed to staying ahead of the curve by embracing the latest financial services industry trends and advanced technologies.

We have incorporated innovative solutions like Artificial Intelligence (AI), Robotic Process Automation (RPA), and Regulatory Technology (Regtech) into our operations.

By embracing these technologies, we enhance our operational efficiency and deliver a seamless, customer-centric experience. This approach might set us apart in the competitive financial services landscape