Curated by: Sergio A. Martínez

It’s no wonder, then, that the FinTech industry has seen explosive growth in recent years, and there are no signs of it slowing down thanks to the increasing availability of data, the rise of mobile commerce, and the growing demand for innovative financial products. With more and more consumers turning to FinTech solutions for their financial needs, bringing very specific financial challenges to an area where economic stability is not guaranteed often, it’s clear that this industry is poised for continued success in the years to come. 

However, what distinguishes the merely good FinTech companies from the best ones? 

There are many vital components to a great FinTech company, from a strong customer focus to innovations in technology, to a deep understanding of the financial industry, A great Fintech company, above all, is always looking for ways to improve its accessibility and the range of options the average consumer has in terms of financial choices, giving people a kind of freedom with their money that they probably didn’t have before. A great FinTech company, in other words, makes our lives easier and more convenient. 

That’s why we want to close out our year here at Scio by spotlighting those companies that pushed the envelope in FinTech, distinguished by their innovation, approach, and the solutions they brought to a market growing in importance each day, naming the 5 FinTech Companies to Watch coming 2023 and beyond.

Paya

Describing Paya as a mere payment processing provider would be missing what makes these companies one of the leading FinTech operations today, exemplifying everything great about this tech field. What Paya offers, after all, is “integrated payment and frictionless commerce solutions that help customers accept and make payments, expedite receipt of money, and increase operating efficiencies”, effectively easing the barriers in the transactions between business and customers, with an emphasis on the Front-End experience that makes using the services offered by Paya a seamless experience.

As a result, you can find the technology of Paya in a wide range of industries, from Healthcare, Education, and E-Commerce, to the Public and Non-profit sectors, thanks to a digital infrastructure that offers security, speed, and convenience no matter what kind of solutions an organization is looking for. For these reasons, we believe we will hear more from Paya in the future while they continue to offer the best solution in frictionless payment.

Wise

International money transfers can be a real pain. You have to contend with different exchange rates, and you may also need to open a bank account in the country you’re moving to, which can be a time-consuming process. And that’s without getting into the fees associated with transferring money between countries, which can eat into the amount you need to move, and it can take a while for the money to reach its destination, meaning you may have to wait a while before you can access your funds. All these factors can make moving money between countries a bit of a hassle, if not impractical.

Thankfully, there are a few ways to minimize the hassle of international money transfers, and there’s no better option than Wise, which makes living a global lifestyle easier than ever before. The main core service that Wise offer is a platform that takes care of the hassle of sending money overseas with very low fees, enabling the transfer of money between countries more practical than ever before, and ensuring your money is where you need it when you need it, be it sending money back to home, or having access to it while you travel and live abroad. 

Stash

Many people believe that investing is something that only wealthy people can do, and for the average person, getting into this area of finance can seem like a daunting task. That’s because when most people think of investing, they probably envision stock portfolios and real estate ventures that require a significant amount of capital to get started, and while these are certainly valid options, they’re not the only opportunities out there. In reality, there’s a whole world of investing beyond stocks and property to grow your money if you’re willing to take on a little bit of risk. 

That’s why one of the most exciting applications of FinTech platforms is the potential to democratize investing, and there are now several companies that are working on ways to make investing accessible to everyone, which is where Stash comes in. Stash is a platform that makes investing “easy and affordable for millions of Americans”, to create more financial freedom for its users, making this area of finance more democratic and accessible all around. As one of the biggest promises of FinTech, what Stash brings to the table is the power of the average person to take better control of their financial future. That’s why it is exciting to see what will await Stash in the future, undoubtedly changing the way we look at investing.

Sequence Shift

While it’s convenient to pay bills over the phone, the idea of doing so nowadays seems antiquated, if not downright risky. After all, if you give your credit card information over the phone, there’s no way to know what will happen with that data down the line, it’s easy to impersonate a legitimate business, or if they’re just going to use your information to make fraudulent charges. And even if the company is legit, there’s always the chance that your information could be stolen in a data breach. 

All in all, paying over the phone seems like a relic from another era when our sense of information security and practicality were different, which is why the technology of Sequence Shift seems so promising and exciting at a time when having a wide range of options to pay for stuff is more desirable than ever. Simply put, what Sequence Shift, an Advance Technology Partner of Amazon Web Services, offers is the security infrastructure necessary to make safe payments over the phone when interacting with AWS environments, reducing the risk of using this method, and bringing a better customer experience by making phone payment viable again. With that, Sequence Shift demonstrates that sometimes innovation is bringing back methods and practices that, on paper, seem a thing of the past, but only because no one has thought of a way to improve on them and bring them in line with the expectations of the modern user. And as a partner of Amazon, we can expect Sequence Shift to reshape how we see online payments in the not-too-distant future.

Prosper

When people need to borrow money, they usually have a few options. They can take out a loan from a bank or other financial institution, borrow from friends or family, or use a credit card. And for many people, taking out a loan from an acquaintance is the best option. One reason for this is that friends are usually more willing to give favorable terms, such as lower interest rates or longer repayment periods. Another reason is that borrowing from friends can be less expensive in the long run, since there are no fees or other costs associated with the loan. Finally, people often feel more comfortable borrowing from friends than from businesses, because they know that their relationships will not be adversely affected if they can’t repay the loan.

However, when so much of our financial activity occurs online, this option may seem out of reach for many people, and considering that loans are often done with a degree of urgency, a solution for this specific challenge would be more than welcome in the FinTech landscape. And Prosper more than delivers on that front. In short, what Prosper offers is a personal lending concept where a group of lenders (or more accurately, investors) can let anyone borrow money through a P2P system, which keeps interests as low as possible, through a direct deposit that will arrive at you in no time at all. With a monthly repayment method that lets you choose your payment rate, it’s no wonder that Prosper is positioning itself as a leader in the emerging field of e-lending, so worth keeping an eye on.

Final thoughts

No one can predict the future, but with more and more people using their smartphones as their primary way to bank, the growth of FinTech as an industry is only going to grow. This means that we can expect to see more investment in these technologies, like the widespread adoption of mobile-friendly features like touch ID and facial recognition, and we can expect to see more FinTech startups focused on developing countries, where there is a great need for financial services but a lack of infrastructure. 

And for now, these companies illustrate why this field remains so exciting and worth investing and participating in. FinTech, as a space, holds the promise of a future where finance is integrated seamlessly into our everyday lives, and the innovations put forth by these companies demonstrate why. And who knows what the future will bring? But one thing is for sure: it’s going to be fascinating to watch!

Scio is an established Nearshore software development company based in Mexico that specializes in providing high-quality, cost-effective technologies for pioneering tech companies. We have been building and mentoring teams of engineers since 2003 and our experience gives us access not only to the knowledge but also the expertise needed when tackling any project. Get started today by contacting us about your project needs – We have teams available to help you achieve your business goals. Get in contact today!

Curated by: Sergio A. Martínez

But what awaits this sector in 2023? From mobile payments to digital investing, FinTech is making it easier for people to manage their finances in a way that suits their needs. And as the sector continues to grow, it is only going to become more prevalent in the lives of the average person as the global economy becomes increasingly digitized. This is creating a need for efficient and secure digital financial solutions in all regions, especially in developing countries that are continuing to grow in wealth. Access to technology means these countries are starting to turn to FinTech companies for financial services and infrastructure. 

In more local markets, as more baby boomers reach retirement age, there is going to be a growing demand for financial products that can help them manage their money in a way that meets their unique needs. Combined, these factors are all helping to drive the growth of the FinTech sector, resulting in some interesting, and maybe unexpected developments to keep in mind when 2023 arrives here, so let’s look at some of the trends that await this sector in the coming year.

#1: The rise of alternative finance

In the past, if you wanted to borrow money, your options were pretty limited: taking a loan from a bank, perhaps a friend or relative, or even dubious “payday” businesses with sky-high interest rates. But thanks to the rise of alternative finance, there are now many more options available, so it’s now possible to apply for a loan online, or even use options like cryptocurrencies as collateral. This has made borrowing money easier than ever before, giving people more choices in how they obtain funding. As a result, this “alternative finance” has made it possible for everyone to access the money they need, regardless of their financial situation.

After all, just a few years ago, the financial sector was dominated by a handful of major banks, but that is no longer the case. Driven by the FinTech sector, alternative finance has opened options outside of traditional banking systems, which can include peer-to-peer lending, crowdfunding, and even cryptocurrency. And for many people, these alternative finance models offer a modern and convenient way to access the financial services they need. However, it also comes with its fair share of risks; with less regulation than traditional banks, for example, alternative finance providers are not always held to the same standards, so doing the research before using any type of alternative financial service is still advised, although the industry seems to be having some advancements in this regard. But despite the risks, the rise of alternative finance will change the financial landscape in a big way next year.

#2: The decline of the “unicorn”

In recent years, the term «unicorn» has been used to describe privately held startups valued at over $1 billion. These companies have become the stuff of legend, and their founders are often treated like celebrities ready to disrupt entire industries and traditional business models with innovative approaches or technology never thought of before. However, there are signs that the unicorn craze is beginning to fade, and as more and more companies reach the $1 billion mark, the achievement is starting to lose its luster. In addition, many “unicorns” have failed to live up to the hype, with several high-profile flameouts in recent years, like the financial incidents of Theranos and FTX. As a result, it’s becoming increasingly clear that the days of the mythical unicorn company are numbered.

Once the poster children of the startup world, their high valuations were often based on unrealistic growth projections, with their business models dependent on low-cost labor and regulatory arbitrage. As a result, “unicorn companies” are not sustainable in the long term, and cracks have started to show; next year we will probably be leaving behind this experiment in favor of more responsible, considered investments, especially when it comes to a sector that bears so much responsibility such as FinTech. So, for investments in 2023, the shift in power between startups and established brands and models is going to be massive.

#3: An explosion in passive income

In a world where nearly everything is moving online, it’s no surprise that FinTech is experiencing a boom. From simple apps that help you track your spending to complex investment platforms, there are now more ways than ever to manage your money. However, as the industry continues to grow, one of the most significant trends will be the rise of passive income opportunities. With so many people working remotely or facing unemployment, earning money without active effort will become increasingly appealing. 

There are already several ways to build passive income through FinTech platforms, from investing in digital currencies to lending money through peer-to-peer applications. And as the industry continues to evolve, we can expect even more options to emerge. After all, there’s no denying that we’re in the midst of a financial revolution, and technology has allowed us to access a world of financial opportunities that were once out of reach. So, as our options continue to grow, so does the need for ways to make our money work harder for us, which is where the popularization of passive income comes in; by investing in things like real estate or index funds, we can earn money without having to actively work for it. And as the world of FinTech continues to evolve, there will be more and more opportunities for us to build these kinds of income streams, which will be a growing sector as the recession ebbs and flows through the next year.

A year of change

Only time will tell if 2023 will be the «Year of FinTech.» For one thing, the industry is becoming increasingly mainstream, with more and more people using FinTech products and services daily. In addition, the industry is attracting an increasing amount of investment, indicating that there is significant interest in its potential. So, as the industry is continuing to evolve and innovate, with new ideas and products, such as contactless payments to AI-powered financial advice, being developed all the time, and after the pandemic accelerated the shift to digital channels, there’s no turning back. It’s time to embrace the future of finance.

The Key Takeaways

• 2023 is going to be a very interesting year for FinTech, with plenty of technologies and innovations finally exploding into the mainstream.
• Several factors go into these trends, such as how the bar of accessibility is lowering, and how certain demographics will need solutions outside of traditional finance.
• This will result in some trends that the sector needs to watch closely, such as the rise of alternative finance, the death of the “unicorn” companies, and the popularization of passive income.
• With FinTech finally entering the mainstream, 2023 will see this industry establishing itself as a normal part of our daily lives.

Scio is an established Nearshore software development company based in Mexico that specializes in providing high-quality, cost-effective technologies for pioneering tech companies. We have been building and mentoring teams of engineers since 2003 and our experience gives us access not only to the knowledge but also the expertise needed when tackling any project. Get started today by contacting us about your project needs – We have teams available to help you achieve your business goals. Get in contact today!

Curated by: Sergio A. Martínez

So, as financial technology continues to evolve, there is an ongoing debate about the appropriate balance these platforms must have between responsibility and innovation. After all, the FinTech industry has the potential to cause the same type of economic impact as banks and should therefore be subject to similar oversight, but it can also be argued that traditional financial institutions are risk-averse and slow to adopt new technologies, which ultimately hurts the people who need these services the most. There’s no easy way to answer this question, but it is clear that both responsibility and innovation are important considerations in the world of FinTech. 

So how to thread this line, ensuring a FinTech product can offer new solutions for the market while keeping responsibility as part of its design? Futureproofing these technologies might be the answer. In the words of the financial blog Finance Derivative:

“As the years pass, it is becoming far more difficult to determine what the next decade will entail concerning technology innovation, due to the speed of digital transformation. This means it is important for organizations to futureproof their processes in the best ways possible. Network management and innovation is key to this, particularly for the FinTech industry due to the ever-rising data traffic in that sector.”

Solving the problems of today (and tomorrow)

The FinTech industry is one of the world’s most innovative and fastest-growing sectors. However, it is also an industry that is constantly evolving, and companies need to be future-proof to stay ahead of the curve. Considering the complexity involved in financial work, innovation requires a careful balance between four key areas that not only demand solutions today but also keep an eye on the future, overcoming challenges as the financial landscape changes. These areas are Regulatory, Data, Security, and Market, and each present their own unique angle to correctly futureproof a FinTech platform:

• Compliance: From mobile payments to peer-to-peer lending, FinTech companies are upending centuries-old business models and introducing new ways for people to interact with money, but to do so, they must navigate a complex regulatory landscape to stay compliant with the law. With new laws and regulations being introduced regularly, FinTech firms need to ensure that their products and services are compliant now but can adapt if a sudden regulatory change upends their service or business model.
• Data: FinTech companies need to deal with increasingly large volumes of data, and the ability to process and analyze it quickly and efficiently to make decisions about their products and services can make or break a FinTech platform. There are several ways that companies in this sector can deal with this challenge (including using cloud-based solutions and hiring data scientists), but the most important thing is to have a clear understanding of what data is needed and to design systems that can withstand an increasing amount of information every day.
• Security: As the world increasingly goes online, FinTech companies are under constant threat of cyber-attacks, thanks to financial information’s place as some of the most valuable data that hackers can obtain. FinTech companies must invest heavily in cybersecurity to protect their customers’ data, against criminals who are constantly finding new ways to bypass security measures, making security a challenge that FinTech companies must face daily. To stay ahead of the curve, FinTech companies must always be on the lookout for new threats and be quick to adapt their security measures, anticipating any exploit that might endanger their business and their customers.
• Market: In the world of FinTech, competition is fierce. Every day, new startups are vying for attention, and established companies are working hard to maintain their market share. This ultra-competitive environment can make it challenging for companies to survive, and to succeed. Companies not only need to have a strong value proposition and a clear plan, but also a way to stand out from the crowd and be able to appeal to a wide range of customers in the long run. How will your product fare when (not “if”) the financial landscape suddenly changes? Is your niche stable enough? Are there growth pathways your product can take to ensure long-term viability? 

As such, while the challenges facing FinTech firms are significant, there are also huge opportunities for those who can future-proof their businesses. By staying nimble and keeping up with the latest trends, FinTech firms can position themselves for long-term success in an industry that is only going to continue growing in importance.

Staying ahead of the curve

“In an increasingly digital world, the financial sector is under growing pressure to keep up with the times. FinTech startups have been at the forefront of this change, offering innovative solutions that are shaking up the status quo. However, as the industry continues to evolve, it is important for FinTech companies to futureproof their products to keep ahead”, says Rod Aburto, Service Delivery Manager and Senior Partner at Scio. “This means identifying emerging trends and developing products that meet the needs of tomorrow’s consumers, observing regulatory changes, and ensuring that compliance doesn’t stifle innovation. With the right approach, FinTech companies can ensure that they remain at the cutting edge of an industry that is only going to become more important in the years to come.”

Of course, creating a product or service that will still be relevant and in demand five, ten, or even twenty years from now is easier said than done. Predicting the future is never an exact science, and we know here at Scio how futureproofing presents unique challenges that can test any expertise in the field. However, by being smart about the market, listening to any warning signs, keeping up informed on the competition, and cultivating positive relationships with both consumers and overseers, FinTech firms can give themselves a better chance of still being around – and thriving – for years to come.

The Key Takeaways

• FinTech exists in a space where demand is high, but volatility is very likely, so developing useful products is always a challenge.
• The main issue is keeping a balance between innovation and responsibility, which is hard to accomplish in financial products.
• Futureproofing a FinTech product in four key areas (Compliance, Data, Security, and Market) is crucial to ensure success.
• Developing FinTech applications requires smart analysis, expertise, and the ability to extrapolate information to ensure a product thrives in the long run.

Scio is an established Nearshore software development company based in Mexico that specializes in providing high-quality, cost-effective technologies for pioneering tech companies. We have been building and mentoring teams of engineers since 2003 and our experience gives us access not only to the knowledge but also the expertise needed when tackling any project. Get started today by contacting us about your project needs – We have teams available to help you achieve your business goals. Get in contact today!