7 key areas of the new financial ecosystem

The Fintech market has evolved to double the number of startups in the sector and at the end of 2021 there were more than 26,000 new companies, which reached a financing value of 20,400 million dollars in the world.

Softtek, the Spanish Cooperative Bank (Caja Rural Group), Mad FinTech, the Madrid City Council and Ecofin have analyzed the keys and main players that will mark the future of the sector in the “2022 Fintech Market Ecosystem” report that they have presented at the InnoBank2022 event.

“The Fintech ecosystem experienced great progress in 2021. Everything indicates that the sector will not stop growing and revolutionizing the market with new applications of technologies that are increasingly more advanced,” explains Rafael Conde del Pozo, Business Development & Innovation Director at Softtech EMEA.

Fintech market

The report sets out the strengths and the ideal market conditions for companies belonging to this sector to develop efficiently, without being left behind. The areas that will stand out the most are the following:

• New Banking: digital acceleration will be the indispensable factor for this sector, since it gives it rapid growth and differentiation from its competition. The focus of this professional activity has been changing until it reaches the current one, the customer-centric, which, as its name suggests, puts the customer at the center of operations. The basic future strategy that this sector must follow, in order to maintain the accelerated pace of digital innovation and omnichannel services, will be based on creating new alliances with Fintechs and other financial providers.
• Payments: Payments through social channels and messaging, which were a great innovation in this sector, will continue to grow and will get rid of the limitations that are currently imposed on them. Payment methods will be adapted to the new needs of the market, although they will maintain their own rate of innovation linked to technology, along with payments through social channels, the use of open platforms that expand payment possibilities will be increased, and will become the main trend in the future.

• Alternative Finance: this area had an initial boom, known above all for crowdfunding, now it is at a certain standstill due to the growth of other payment and financing methodologies. However, contextual feedback prior to investment is beginning to gain importance and equity crowdfunding or capital crowdfunding is positioned among the main trends with the greatest future prospects. In addition, the sector is attentive to new forms of alternative financing structured as funds to attend campaigns or specific sectors.

Globally, in the last two years the number of Fintech startups has doubled

• WealthTech: This sector is dependent on advances in Big Data and data analytics to be able to carry out its basic functions (data control, management and protection). WealthTech is one of the trends with the greatest potential for future development thanks to the interest generated by some of its activities, such as Autonomous Finance, and the different types of Robo Advisors are consolidated as the main channel for growth, providing security and financial stability. Innovation connected to AI and ML will be a fundamental aspect in order to solve the current obstacles in the sector and will provide great opportunities for future growth.
• RegTech: This is an essential sector since it is linked to security. Data, privacy and security systems will continue to maintain the importance they have acquired in recent years. But the future in the RegTech area is marked by the ESG (Environmental, Social and Governance) approach. All areas of this sector are governed by the applicable regulations that arise and will continue to arise, innovation must find ways to improve the work following these conditions at all times.
• RiskTech: As its name indicates, the future objective of this sector is to become an essential tool so that players can anticipate what is coming, and thus establish itself as a risk control strategy at the constitutional level. AI is back in action, which together with RiskCloud systems are consolidated as key technologies during the next two to five years. Within this sector, ThirdParty Risk Management will also be essential for the future, thanks to the growing need to control security measures in external companies, with which there is increasing collaboration in all sectors. This tool becomes an essential system for those who manage to reduce the costs of risks.
• blockchain: Within this sector, distributed systems, DeFi, are positioned as one of the trends with the greatest growth potential due to their development during the last two years. Blockchain offers greater control and scope of possibilities for consumers. It will also create a new universe of inclusive finance, within which new systems such as cryptocurrencies or NFTs will be developed and democratized, which in turn will contribute to the creation of new and secure payment systems through Blockchain networks. Even so, the future of the sector is focused on the development of the Metaverse, which can already be seen in most economic and social sectors.