By Mr. Kunal Sawhney, CEO, Kalkine Group

Mr. Kunal Sawhney

Technology and fintech can have a staggering effect on the overall economy, globally and locally. After a challenging 2022 but also some growth for the technology sector, it is important to see how it does in 2023. 

S0, there will be trends in 2023 different from what we have seen this year. As foreseen by many experts, the digital transformation journey would take off for an enhanced platform in the coming year. Be it metaverse, edge computing, or technology skills development, experts are optimistic about new scaling in 2023.

Technology spending to go up

Growing concerns over an impending recession early next year have caused some pessimism to descend on the market this year. So, discretionary spending has definitely slowed toward the end of the current fiscal year. 

However, despite a slower economy, there was also growing demand for leveraging technology for ease of getting things done at a low cost. Invariably, spending on technology development by companies accelerated and is likely to continue in 2023. 

Operations have become highly tech-driven, leading to greater dependence on software. This will create a demand for software development platforms with soaring investment. Companies will inject more funds into scaling their technology to stay relevant.

We can also see a lot of effort into cutting corners by firms. So, many services will be outsourced in the market. The tech-skilled outsourcing market, which remained subdued for most of the last two years, might spring into action.

Technology skill gaps to become narrower  

The skill gaps this year brought a little trouble in the IT industry because they remained conservative in spending much on the expansion of projects. However, that might change in 2023 as firms can look to rope in more people from across the globe. This new workforce will require a lot of training and skill-development sessions, leading to higher spending by employers. The remote work model is likely here to stay, making these skill development spendings more relevant. 

It is not only the mid-level and entry-level workforce that would require filling the knowledge gap, but even the C-suite leaders of large corporations also need to be abreast of technological innovations to run the show without hiccups. They must also be part of any training and development routine to be on the same level. So, the IT training segment would be robust in 2023. 

UX to be optimized

Cutting-edge technology also ensures competition among enterprises to retain clients and customers. This brings the whole discussion to a seamless user experience. So, one of the forecasts for the coming year is using technology to maximize the user experience. So, the sector can be at the forefront of growth and innovations. Many priorities will go into modernizing the bottom line of organizations which will require the assistance of advanced technology. It won’t be wrong to say that 2023 will be a year for technology. 

Fintech trends: Predictions for 2023

The year 2022 saw drastic events in the fintech sector, from the crypto market crash to newer digital financial regulations. So, predictions are now pouring in from all quarters about how this sector would do in 2023. And it looks to be promising for the sector next year.

AI to revolutionize the fintech sector?

Artificial intelligence has already brought about a paradigm shift in the financial sector in the last few years. In the coming year, it will only be more intensified. AI can shake up the fintech sector in 2023. More and more companies in the domain will likely incorporate AI to do business which will open a floodgate of fresh innovations leading to a quick lighting service for the people. So, 2023 will most likely be a year of semblance where finance and technology will entwine. In short, the sector will allow technology to do all the talking. 

Growth of embedded finance

The embedded payment industry is all set to boom in 2023, with a growth projection of 40.4 per cent YoY, according to a Research and Markets report. The most upcoming trend in the fintech environment is the Buy Now Pay Later (BNPL) option, which has leapfrogged over the last couple of years. People are already loyal fans of this option when capital availability has become scarce, and the economy is dealing with rising inflation. As per Global Data, by 2026, the BNPL sector will likely touch US$ 576 billion in transactions globally.

The year 2023 will belong to alternate finance

Alternate finance referred to as those transactions outside of traditional banking can gain traction in 2023. The sector, valued at US$ 6.62 billion, is slated to grow by 20 per cent next year. Technology has taken borrowing to the next level. Lending can have more ease of doing business in the coming year, where business loans, equity lending, and insurance will likely become more convenient. 

ESG and fintech in 2023

Environmental, social, and corporate governance, also known as ESG, will hugely impact the fintech sector. Companies have a preference for ESG to have a piece of the pie, positioning themselves for rapid growth. 

Some experts say that ESG assets will cross the US$ 53 trillion mark by the year 2025, so the next year will be crucial from that standpoint. 

Conclusion:

When it comes to technology and the fintech industry, 2023 can be a landmark year as humans will be on the cusp of transiting to a tech-driven world propelled by smart innovations. Be it blockchain, alternate finance, or ESG, finance, and technology can recover after a rigorous year.