Fintech trends that ruled 2021 and outlook for 2022

Majority of the shoppers in India, especially in tier 1 and 2 cities prefer digital mode of payments or computerized channels. Also, with smartphone being one of the common gadgets for all today, digital banking have become quite common for many users. Interestingly, the sector has come a long way and is gaining momentum with lot of players entering the market, envisioning change in digital transactions landscape and gaining enormous success. With this, human communication for banking services have also drastically reduced, which is crucial with the new variants mushrooming in different parts of the world.

With these factors, the fintech industry has seen an interesting metamorphosis. Here are some of the top trends that shaped up the sector in 2021. Also, the year 2022 will see more of these trends and growth of these models.

Emergence of BNPL model: Buy Now, Pay Later model is one of the offering where an individual can opt for buying without any interest rate and can repay through small ticket size amounts. The model is quite booming and is considered one of the most preferred transaction models for 2022. These models also facilitate credit options for those who do not have access to credit or do not have credit score. The model is prospering as the pandemic and job losses gave the model the required push. With the convenience that the model provides on payments, it enabled and empowered consumers to buy without any interest rates and pay at their convenience.

Technology companies entering banking and payments services: A pure example of Product Innovation is improvised and hyper-personalized banking services and offerings by technology companies. This offering has led to increased penetration of banking services in tier 2 and remote parts of the country and is all set to receive a great boost in 2022.

Interestingly, the new lenders (fintech companies/ NBFCs) are smaller than national or co-operative banks, but they provide convenience and range of services to customers for repayment of loan. One of the most preferred aspect is the technology based solutions, Artificial Intelligence based systems that can process huge files and documents on requests.

Increased Collaborations where fintech, tech, NBFCs for offerings: With the recent announcements by corporates on acquisitions, collaborations and partnership models to expand service offerings.

In continuation to these trends, the year has also seen increased measures being opted by fintech companies to prevent cyberattacks. With increasing acceptance of such platforms, it is highly crucial for the sector to adopt security measures, so as to maintain and build the trust level of consumers at large.

While the year 2021 saw partnerships, it is high time that the sector witnesses more such collaborations and policy level support through favourable policies and regulations to enable the sector to thrive and succeed.