2022 was a year full of news and also dramatic events. The war, rising inflations, layoffs, scandals, populated the year. But it started with predictions and trends: were experts right? Of course, unexpected and dramatic events didn’t allow for the full development of business opportunities and financial solutions in the fintech space. But we can safely assess that most predictions were correct. In 2022, fintech showed its strength and it proved to be a top player in societies and geopolitical order. In this number of FinTech Weekly we want to recap 2022 fintech events and analyze new trends for 2023. Follow FinTech Weekly to discover fintech news and events – for free!
2022 saw a crash in the crypto space, but despite this, the market witnessed the rise of new projects and major changes – like the Ethereum upgrade. The fintech space, in general, gave new opportunities to business owners and found new solutions to address problems like frauds. Also regulators designed new frameworks and governments introduced new CBDC – Central Bank Digital Currencies. But what about 2023? Experts think that for Web3, the focus will be on education and awareness. Blockchain technology will play a major role, and only responsible and transparent businesses will succeed. People, investors and entrepreneurs will focus more on decentralization, and fintech will be the tool to democratize the access to financial resources.
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Predictions seem to already prove their reliability. The focus on decentralization, the will of giving people control over their data and the need for transparency are leading to the creation of new systems. One of these systems is Data Mesh, a decentralized architecture that aims to allow access to data in a transparent way within any organization.
When 2021 ended and 2022 was about to begin, we covered the intention of Russia to allow crypto investments by foreign firms. The war wasn’t started, and the events of February changed the priorities of governments and people across the world. Despite this, and maybe especially because of the war, Russia is still strongly focused on digital assets – and it’s finding new use cases for them. The demand for electricity from crypto miners is constantly increasing, and the government is considering creating new energy infrastructures in Siberia to meet this demand – along with keeping electricity costs low for miners.
At the end of 2021, fintech entrepreneurs and experts predicted that blockchain would be a useful technology to find innovative solutions within the industry to solve social and business issues. They were right, and it seems that the technology will further improve in 2023 – as well as the number of people and entrepreneurs that will use it will increase.
It’s no secret that one of the major problems related to blockchain technology and cryptocurrencies is the cost afforded to produce some digital assets – including Bitcoin. Japanese electrical power company TEPCO – Tokyo Electric Power Company – announced that it wants to address the problem by turning unused electricity into Bitcoin mining.
To further show how blockchain technology and fintech can even be able to change geopolitics, news about the digital ruble can make us reflect on the importance of financial technology for today’s countries. Russians lawmakers submitted a draft to the Russian parliament that aims to regulate the introduction of the Russian CBDC – Central Bank Digital Currency. The project was accelerated to face the Western sanctions imposed over Russia.
Predictions for 2022 saw fintech as the top player in financial inclusion. To reach this goal and, at the same time, comply with stricter regulations, fintech companies and banks are increasingly partnering to reach emerging markets.
To face another top issue of fintech, frauds, fintech firms are finding new solutions to avoid them and help customers to operate in a safer environment. One of these companies is mano.bank, a Lithuania-based fintech that partnered with iDentify to create an identification process that will guarantee customers one more layer of security during the onboarding process.
Asia, as well as the rest of the world, witnessed ups and downs for what concerns fintech. But financial technology is still one of the main drivers towards financial inclusion, which must be reinterpreted as the degree of access not just to traditional financial services, but also to all the services and products by the modern financial space. After the bubbles of 2022, finding investments might become harder in Asia, but for sure, fintech firms that will continue to focus on people’s needs are here to stay.
Bubbles and layoffs made regulators focus more on the fintech market. All the fintech companies involved in scandals and problems also made critics become more severe. That’s why the Paycheck Protection Program (PPP), an initiative of the US government to address the difficulties faced by businesses because of the pandemic, was strongly criticized. Even if a Fed study proved that the loan initiative benefited healthy small businesses, critics argued that funds were unevenly distributed, because they were released also to fake fintech firms.