Published on: December 8, 2022
Doubtless, 2022 was an exciting year for the financial industry, from the crypto market crash to new financial regulations and the rise of "Digital-Only" Banking.
The fintech industry is evolving with market trends to meet customers' needs, business goals, and regulatory demands worldwide. In 2023 we expect to see robust technologies shaking the finance industry and enabling it to strengthen business propositions, enrich customer experiences and boost revenues.
Let's examine the fintech trends that will dominate the industry this year and how they will shape businesses, UX, and government regulations worldwide.
The ecosystem of embedded finance is enormous, and it is expected to grow significantly this year. Researchers estimate that the embedded payment industry will grow by 40.4% annually. 
With embedded finance, companies can offer complete offerings throughout a customer's journey to increase customer satisfaction and business revenue. It covers financial services such as banking, credit, investment, payment processing, lending, or insurance. Think of an e-commerce merchant providing insurance in a seamless, convenient, easy-to-use customer journey.
Among all forms of embedded finance, buy now pay later (BNPL) is a notably growing sector. This payment option enables purchasers to buy now and pay for products later, usually by splitting the purchase sum into multiple installments.
Alternative finance, also referred to as Alt Finance, has been around for many decades, but its popularity has increased until recent years. Today, the alternative financing sector has a promising outlook as it is valued at $6.62 billion and is expected to grow by 20 percent in 2023. 
Alternative financing refers to financial services developed outside traditional banking. This industry has brought innovative products and new thinking methods to business borrowing. The non-bank providers use financial technology to offer and improve convenient means of finance — in categories such as equity finance, business loans, insurance, and much more.
Although traditional banks still dominate the business loans market, we expect Alt Finance to grow considerably with a CAGR of 6.3% between 2022 and 2028.
SaaS solutions have completely revolutionized traditional software product licensing models. The global SaaS market is valued at over one hundred billion dollars and continues to grow significantly due to its popularity among SaaS providers and users.
Software as a Service (or SaaS) is a way to deliver software applications using the Internet, freeing businesses from complex software and hardware management and installation. The platforms provide a better customer experience and faster product delivery, resulting in increased customer and user satisfaction. Among all SaaS solutions, in 2023, we expect to see increasingly low-code or no-code solutions, white-labeled SaaS, and micro-SaaS products.
Artificial intelligence has shaken the financial industry, and banks are some of the most profitable institutions embracing this technology. In 2023, we expect the financial sector to continue adopting AI solution strategies.
AI technology will reduce bank operating costs by 22% around 2030. That could mean savings up to $1 trillion ahead.
Artificial intelligence (AI) enables the automation of complex and high-value processes. Within the fintech sector, AI helps support chatbot interactions, personalized customer service and drives infrastructure decisions - assisting financial entities in combating cybercrime, money laundering, and fraud.
AI algorithms in financial software development will play a bigger role in determining who gets access to various financial services and how. Its adoption into the fintech industry to make decisions on issuing loans, negotiating, and detecting fraud will intensify in 2023. However, the public is now raising demands concerning the ethical impact of AI in such mission-critical decision-making.
According to a recent Deloitte survey of IT and line-of-business executives, 86% of financial services AI adopters say that adopting this technology will be critical t to their business's success in the next two years. 
The financial sector is one of the most heavily regulated industries in the world. This year, we expect RegTech to disrupt the regulatory landscape by providing advanced tech solutions for compliance issues. With the entry of alternative finance, blockchain, and AI, the FinTech industry will raise attention from governments worldwide.
RegTech has emerged to help businesses streamline nearly every part of the compliance process. With the help of cloud technology, machine learning, and big data analytics, RegTech will intensify its solutions to enable financial institutions to identify and prevent risks efficiently and accurately in the coming years.
Juniper Research predicts the RegTech industry will experience 200% growth between 2022 and 2026.
It's impossible to conclude how things will turn out this year. However, we know with certainty that 2023 will be a significant year for the financial industry – full of technological disruption, regulations, and more market trends.
Out of all the top fintech trends in 2023, embedded finance and alternative lending will be the most remarkable. AI technology will keep shaking the market and help businesses to reduce overhead costs. In addition, SaaS platforms will continue to improve customer and user experience.
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