What’s next for fintech in 2023?

At the start of last year, fintech investing was booming. But as the current cost of living crisis hit and interest rates rocketed, investment slowed down rapidly. In fact, KPMG tells us UK fintech investment dropped to $9.6 billion in the first half of 2022 – down almost threefold from $27.8 billion in the same period in 2021.

Fintech are resourceful beasts though, and in times of crisis propositions tend to get sharper and smarter. There will undoubtedly be some casualties; companies that over stretched or lost some focus may struggle. But those with strong leadership and that have kept a keen eye on cashflow will probably emerge stronger. Plus, appetite for awesome products doesn’t tire. And there’s plenty of exciting developments going on in the fintech space right now.

Indeed, innovations in fintech over the past few decades have made an immeasurable difference to our lives. And the scale at which we now rely on new technologies to shop, communicate and manage our finances have accelerated due to the covid pandemic. 

However, while many welcome the pace at which fintech continues to grow, others will find the new technologies – plus the sheer pace of change – over the coming months and years overwhelming. With this in mind, here’s some of the trends to look out for going into 2023 and beyond, plus my thoughts on what organisations should prioritise. 

Closing the digital divide

While new technologies have made life easier for many of us, for those who didn’t grow up in the digital age – or missed it completely – they can be especially tricky to navigate. For example, if you grew up in the 80s or 90s and have children, it’s likely they will be almost entirely dependent on digital platforms. Consider the news. For older generations, a newspaper may be the preferred method to keep up to date. Their children and grandchildren, however, have numerous online sources – such as websites, forums, blogs, and chatrooms – available to them.  

The same applies to banking. While some will think nothing of opening an app to check their balance or taking a selfie to prove their identity, for the less tech savvy – or those with disabilities – this process can cause unwanted stress. The problem is, the more digitally dependent society becomes, the more crucial these skills will be. It’s particularly worrying, then, that 10 million UK adults say they can’t access the internet by themselves. And 11 million people lack the essential digital skills now needed for everyday life, according to data from Lloyds Bank. 

Going forward, the advancements we’re seeing in fintech will likely increase an already large generational gap. Unless, of course, the issue is tackled head on. It’s vital that organisations work to inform those who aren’t confident using digital platforms and equip them with the skills they need – lest risk them being left behind altogether. 

Given this, our Digital Helpline offers customers digital training over the phone. And our Digital Champions programme saw 20,000 colleagues volunteer to help individuals, businesses and charities become more digitally-savvy.

Inclusivity

The importance of inclusivity in fintech – or any industry, for that matter – cannot be understated. Organisations across the board should be asking themselves if they have a true culture of diversity – one that considers neurodiversity, race, culture, gender, ability and age. This is vital if fintech firms are to truly reflect society. And why I think this trend will undoubtedly extend well beyond 2023. 

Real change, though, can only be driven from within the leadership of an organisation – from the top down. And role models are extremely important so that those underrepresented in society feel they can achieve. As I say, though, inclusivity is important across every industry. In the case of Lloyds Banking Group, our Race Action Plan details our commitments to a truly diverse workforce. And our Black Business Advisory Committee aims to support Black entrepreneurs across a host of industries, too.

And in terms of neurodiversity, the Group recently took part in the Leeds Inclusive Employers Network – which promotes inclusion. This event gave a platform to those engineers with disabilities who were flourishing, plus the technology that was bridging the gap. 

Moreover, we run several initiatives to attract more women and non-binary people into tech roles across the organisation too, such as our Women ConnecTech network, which encourages women of all ages to reskill and pivot their careers into tech. We are also major sponsors of the Athena Hackathon run by ShowCode. And our Elevate Leadership programme focuses on developing our talented colleagues to ensure we represent the society we serve. And even more widely, our gender diversity network, Breakthrough is one of the largest in the UK – with 15,000 members and 4,000 mentors. 

Lastly, we have incorporated programmes such as Signly to our public facing website, which provides in-vision sign language translation on any webpage for any sign language user, allowing for easier access to essential financial information. And those who are blind or have low vision can now connect securely with Lloyds Bank through the Be My Eyes mobile app, which provides access to sighted volunteers and organisation reps who can provide assistance.

Web3.0 and the growth of bespoke communities

Many pundits bet that Web3.0 will be the future of the internet. If you’ve not come across the term before, it refers to an iteration of the web which includes decentralisation, blockchain and token-based economics.

You see, thus far, we’ve had two iterations of the web: Web 1.0 and Web 2.0. Simply put, Web 1.0 was the first generation of the internet – it was static, designed mainly for those searching facts. Whereas Web 2.0 – the second generation – contains more dynamic content; blogs, social media, podcasts, etc – designed with many different users in mind.  

With Web3.0, it’s the decentralisation element that’s key. You see, the internet as we know it is owned by centralised entities such as big tech firms. With Web3.0, though, ownership would be spread across builders and users – just like the blockchain (DLT) technology that powers it. 

This opens potential for an entirely new model, one that only exists in small pockets today. For example, imagine you and a group of like-minded individuals wanted to create a community (like a Facebook community or a local town club) and then decided that this community should govern itself with its own rules and system of currency. Well in web3, it’s already happening. And could prove to be how each of us engages with all the micro communities we want to be part of in the future. This will not be complete in 2023; it will take longer than that to reach all of us. But it is already happening today and I’d expect there to be more glimpses of the experiments testing things out in this space this year.