2022 Embraces Financial Innovation: Top Trends and Predictions

As we bid 2021 farewell, the takeaway from this eventful year is that we should learn to cling to the wave of change that accompanies the human race and, with it, the wave of endless innovations. 2021 came, and along came the never-ending opportunities of financial innovation to evolve as a race and clutch to any change – if constructive – to optimize our daily lives. Digital transformation hit all sectors globally, with the most remarkable one being the banking sector. The fusion between technology and finance spawned a new phenomenon known as financial technology, more commonly known as FinTech.

Like its successor, 2022 accelerates the growth of Fintech, bringing forth a new novelty of technology evolution in the financial sector. This piece will unveil the endless wonders that financial technology will bring as we burst into this new year. So, let’s dive in.

The Communion of FinTech and ESG

To those not aware of the term Environmental, Social, and Governance (ESG), it is the approach of analyzing and assessing the length in which any corporation behaves in a confident manner to accommodate specific social goals extending beyond the role of the establishment itself. The sole purpose of the ESG is to increase to the fullest the corporate’s profits – on behalf of the corporate’s shareholders.

The aforementioned version of the ESG will witness some kind of alteration to its functionality, though to reach the highest levels of financial innovation. In 2022, ESG’s consideration to increase a corporation’s profile will surpass its essential services, from standard investment selections to accommodating technologies underpinning these investments.

For this to come to fruition, first, platforms will have to rise from the ashes and be built to detect and confirms ESG qualities and virtues. Some of the advantageous benefits include robust practices that deliver competitive advantages, strong programs to boost the corporate’s stock liquidity, and finally, let us not forget the most crucial advantage of ESG, attracting and retaining top talent to reinforce to company’s overall productivity.

The Rampant and Ubiquitous Embraces the Cloud

It is unquestionable that the cloud is the safest choice to drive innovation and, by default heightening competitiveness advantages. Some of the most prominent financial powerhouses on Wall Street, such as JP Morgan and ANZ Bank, announced in 2017 that they would be making the undeniably bold move to switch to the cloud.

A maneuver that later triggered a much more exuberated plan for the remainder of financial firms on wall street to follow in the giants’ It is unquestionable that the cloud is the safest choice to drive innovation and, by default heightening competitiveness advantages. Some of the most prominent financial powerhouses on Wall Street, such as JP Morgan and ANZ Bank, announced in 2017 that they would be making the undeniably bold move to switch to the cloud. A maneuver that later triggered a much more exuberated plan for the remainder of financial firms on Wall Street to follow in the giants’ lead in embracing financial innovation.

Wall Street’s move to soon become a fully-cloud based financial mogul will certainly augment capabilities in some pillar areas, including security, scalability, support, and much more, with the integration with some of some Big Tech giants. Amazon Web Services (AWS), Google, and Microsoft were the leading trustworthy candidates for such a switch.

Goldman Sachs integrated consolidated its data with Amazon’s cloud platform, while Wells Fargo followed in its lead, but this time with both Microsoft and Google. And this is just the tip of the list as it goes on and on as more financial firms welcome this approach.

This alteration in tactics for some of the protectors of the financial realm is mostly driven by the digital awakening that came along with the Covid-19 pandemic. Financial services were forced to stand their ground and be resolute as the world embraced digital transformation on all its frontiers.

Now, 2022 will increase this fierce optimization of the banking sector and the embrace of financial innovation – and all through the cloud, might I add – with streamlined internal communication and collaborations, all the way towards a personalized customer experience. All are attributed to the hasty evolution and progression of machine learning and artificial intelligence, all intertwined with cloud computing and its infrastructure to ensure the upscale of its models.

Digital-Only Banking to Creep the Industry

Financial innovation can always be attributed to the never-ending cycle of change, more specifically virtual banks, as it braces customers to the endless benefits of the digital, virtual financial world.

But when we say digital-only banking, we do not only mean digital-only payments. We mean the comprehensive experience provided by an online bank with the ability to deliver exponential online experience through its mobile platform or application. What makes these banks stand out from traditional banking is the opportunity to bask in the riveting benefits and features, delivering first-rate customer service with the least amount of requirement. All are only one tap away with minimum fees.

Solely reliant on the cloud, alongside the free-floating financial platform, this digital approach to implementing financial innovation into the banking sector is introducing to the world a new attitude towards the incorporation of finance and technology. Letting go of the traditional methods of banking and taking on a digital one will take the global banking sector to new heights and entirely online.

However, one fundamental aspect must be taken into consideration when unleashing a fully digital financial titan into the public, regulations. With the beginning of 2022, this newly risen sector has witnessed a number of regulations that instantly became effective to prevent the authoritarian loss of control in the FinTech sector. Such a regulatory move will be fully achieved to the highest standards of legal arrangements with the Banking Regulation and Supervision Agency (BDDK) presenting two new banking services to the FinTech sectors.

Digital Banking and Banking as a Service (BaaS) were introduced under one regulation in January 2022, emphasizing that any digital banking platform is to strictly offer its services through electronic distribution channels and never a physical one – through an actual physical branch.

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