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5 TECHNOLOGY TRENDS RESHAPING FINANCIAL SERVICES IN 2022

The pandemic may have accelerated digital transformation across the world of financial services , but behind the scenes, banks and lenders still face a significant tech debt, and many organizations are committed to continuing the innovation.

That’s for good reason. Today’s consumers increasingly expect a digital-first customer experience. The days of visiting a local bank branch to access financial services and products are fading away. Fintechs have risen to the occasion, transforming the market and meeting the growing digital demand. For traditional banks and lenders, waiting to innovate is no longer an option—it’s a must to remain competitive.

So what comes next? Here’s a look at the technology trends that stand to impact and transform financial services as we advance.

1. The rapid rise of low-code/no-code solutions

According to a recent survey from TechRepublic, nearly half of companies are already using low-code/no-code solutions (LCNC). The same report also notes that among companies not using LCNC solutions, one in five plans to begin within the year. The driving force behind this trend is the global shortage of digital skills, from software development to data analytics to information security. The pool of technical talent has long been smaller than the demand, and the Great Resignation has only exacerbated the problem. For instance, 75% of software developers  report they’re currently looking for other jobs. Amidst this ongoing talent shortage, there’s another stressor—the need to deploy technology products to market faster and faster. LCNC solutions answer these challenges by making doing so easier and quicker. The technology democratizes software development, allowing business users—or citizen developers—in different functions to design and deploy applications. With the skills gap likely to continue, the interest in LCNC solutions will too. LCNC solutions enable financial institutions to keep pace with technology changes and meet the digital demand, even with limited technical resources.

2. Leveraging data will require adding value—and engendering trust

Financial service organizations have used advanced data analytics to provide consumers with more personalized products. And consumers have been on board as long as they see the benefit. For example, a 2021 consumer survey by Experian showed that 42% of consumers would share personal data, and 56% would share contact information, if it improves their experience. However, this research speaks to growing tension between consumers and financial service providers. The first want more personalized services, but they are also more selective about which companies they share data with. Consider a recent McKinsey study that revealed that 44% of consumers don’t fully trust digital services. As we advance, organizations that want to build and keep consumer trust will need to be thoughtful about the data they ask for and increasingly transparent about how they plan to use it.

3. Doubling down on AI but looking for ROI in the process

AI has proven helpful in multiple ways, from powering recommendation engines and chatbots within the retail world to improving fraud analysis and prevention in the banking industry. But there’s still so much more organizations can do, especially with the AI they already have. Financial service and fintech companies have funneled massive resources into AI solutions. However, only 20% of AI models are ever used in widespread deployment. What’s more, the current average return on AI investments hovers around 1%. This year, expect to see more organizations examining the ROI of AI-powered technology and looking to get more from the investments they’ve made. Technology partners can help by identifying additional opportunities for AI models to drive customer engagement, validate credit scoring, and protect businesses against fraud.

4. Banking-as-a-Service will yield even more choices and more competition

There have long been high barriers that protect traditional financial service organizations from much new competition. But the advent of open APIs and Banking-as-a-Service (BaaS) is knocking these barriers down, yielding a considerable influx of startups that provide banking-like services. And this wave of new fintech has captured consumer interest. Consumers have shown that they’re willing to try financial service products from an array of providers; they’re not married to sticking with traditional banks. In fact, 27% of global consumers  have relationships with neobanks, and 40% report using financial apps outside of their primary banking app. However, the gold rush towards BaaS will yield a few winners and a lot of losers. The question for the near-term is who will survive in this crowded market. Consumers will also begin to figure out what makes sense in terms of how many financial organizations they want to connect with and when to say enough is enough.

5. Embedded finance is the new black in retail

In a similar theme, the influx of embedded finance products into retail experiences continues to gain traction. There’s only more to come. Multiple leading retailers, both longstanding and new D2C brands, have incorporated Buy Now Pay Later (BNPL) payment options into their checkout process, and shoppers are rapidly adopting these new payment methods. One-third of consumers report they’ve used BNPL before . Though the payment method still lags far behind other forms of credit, awareness of BNPL and other embedded finance solutions is rising, especially among younger consumers. Looking forward, expect to see embedded finance make inroads not only with more retailers but also across other industries such as hospitality or entertainment.

These pressing tech trends are reshaping financial services. In the process, they’re bringing new solutions to consumers and new opportunities to banks and non-traditional lenders. Organizations that keep pace with these trends will lay the foundation for their next generation of customers as well as the future of their business.

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4 FRENCH FINTECHS TO KEEP AN EYE ON IN 2022

FinTech is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ​​​At its core, FinTechs help companies, business owners, and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms used on computers and, increasingly, smartphones.

There is a general sense of optimism in the French FinTech scene, owing to effervescent startup culture, increased access to capital, availability of technical talent, financial incentives, and the uncertainty of Brexit as an opportunity for France in the Paris Region. National and foreign investment continues to drive innovation; inevitably, banks and other financial stakeholders will increasingly look to France and the Paris Region for technology, innovation and talent to grow and transform their business.

The following are 4 French FinTechs to keep an eye on in 2022:

Lydia creates mobile daily financial services that remove the complexity and slowness of banking, accessible through an intuitive app and supported by people who genuinely care. It can replace the bank apps only or replace the bank account and services altogether.

IBS Intelligence reported that French FinTech Lydia announced the extension of its Series B with $86 million funding led by Accel. This brings the total Series B funding round to $131 million. Amit Jhawar, the former General Manager of Venmo and Accel venture partner, led the investment for Accel and will join the Board of Directors.

In France, payroll administration has always been a complicated and time-consuming task. Firmin, Florian and Ghislain believed that by creating a platform that could automate payroll tasks, they would revolutionize the somewhat old world of payroll and HR. PayFit serves over 5,000 SMEs in France, Spain, Germany and the UK and has 500 employees, otherwise known as PayFiters, offices in Paris, Barcelona, Berlin and London.

Recently, IBS Intelligence reported that PayFit, a payroll and HR management solution for SMEs, announced that it had raised €254 million in a Series E funding round, a record-breaking amount for a French human resources (HR) startup. General Atlantic, a global growth equity firm, led the round with existing investors Eurazeo, Bpifrance and Accel Ventures. 

Founded in 2016 by Rodolphe Ardant, Guilhem Bellion and Jordane Giuly within French startup studio eFounders, Spendesk now serves over 40,000 end-users at growing businesses such as Algolia, Amboss, Curve, Doctolib, Gousto, Raisin, Sezane, Wefox. Headquartered in Paris, Spendesk has offices in Berlin, London and San Francisco.

Recently, IBS Intelligence reported that Spendesk, the all-in-one spend management platform for finance teams, has raised €100M in Series C funding led by global growth equity firm General Atlantic. All previous investors, including Index Ventures and Eight Roads Ventures, participated in this round, bringing Spendesk’s total funding to €160M.

Sopra Banking Software is a subsidiary of the Sopra Steria Group, a European provider of consulting, digital services and software development. The Sopra Banking Platform offers retail banking functionalities and business features such as accounts, savings, lending, payment, channels, and compliance. Through its engagement platform (DBEP), it designs end-to-end digital banking solutions in a bid to allow customers to transform their bank with integrations and provide customer journeys for an enhanced end-user experience.

Recently, IBS Intelligence reported that Sopra Banking Software (SBS), a global giant in financial technologies, have announced the recent partnership with BANK OF AFRICA to launch a new innovative offering for North to South money transfers based on SBS Open Banking Platform, powered by European open banking platform Tink.

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IS IT TIME TO WORRY ABOUT FINTECH VALUATIONS?

Nu, the parent company of Nubank, reported its fourth-quarter financial performance, and in response to rapid revenue growth and improving economics, the company saw its value drop 9% in regular trading today after falling sharply in recent sessions. Now worth just $8 per share, Nu is underwater from its IPO price and down about a third from its all-time highs.

It’s hardly alone in its struggles. Fintech valuations have taken a whacking in recent months, even more perhaps than the larger software market itself; SaaS and cloud shares have hardly covered themselves in glory recently, but declines in fintech stocks may take the cake when it comes to negative returns of late.

Why do we care? Because fintech may be the best-funded startup sector. TechCrunch reported earlier this year that fintech startups collected around a fifth of venture capital dollars last year. A full one in five bucks from an all-time record venture capital year, we should add.

It’s not an exaggeration to say that as fintech goes, so too goes the startup market, and therefore the profile for venture capital returns.

So how are we to balance falling public-market valuations for fintech companies and simply bonkers-level private-market investment? That’s our question for today. To get our heads around the issue, if not the solution, let’s start with a refresh of fintech venture capital results, the fintech liquidity crunch and what has happened to fintech stocks.

Unless you own many shares of financial technology startups, this will be fun.

Venture capital loves fintech

The amount of capital afforded to financial technology startups is hard to fathom. In 2021, from a total of $621 billion of invested private-market capital generally under the venture aegis, some $131.5 billion across 4,969 deals went to fintech startups. That data, from CB Insights, also indicated that dollar volume for the sector was rising more quickly than deal volume. Which, if you run the numbers, allows for greater deal size over time.

This is from a sector that raised $49 billion in 3,491 deals back in 2020. That’s a 168% gain in a single year.

You know the names: Brex and Ramp and Airbase raised in 2021, just as Stripe did. And FTX and OpenSea. The list is replete with huge companies that help consumers and companies alike manage, invest and move money around.

Chime raised a massive $750 million Series G last August, a deal that pushed its valuation to around $25 billion. Which, you think, naturally makes the company an IPO candidate for 2022, right? Only maybe, it turns out. Forbes reports that the company’s IPO has been pushed back to late 2022, perhaps even the fourth quarter. That was before Nu reported lots of growth and its first full-year adjusted profitability and got a tenth of its value decapitated after suffering declines in prior recent trading sessions.

Does Chime want to go public in that market? Probably not, with investors casting aspersions on one of its best-known global cognates.

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7 FINANCIAL PLANNING RESOLUTIONS YOU WILL ACTUALLY KEEP

With February already underway, many of us have made resolutions for the new year. Common goals include getting into shape or reaching out to an old friend. Another popular resolution is to do better financially. However, keeping these resolutions often proves harder than expected.

Because your financial well-being is so important, you should ensure to set goals that won’t be abandoned within days or weeks of creating them. To avoid this pitfall, I want to give you some quick tips for financial resolutions that you can actually keep throughout the year.

1. Build a budget even if you have trouble adhering to it

If you’ve ever worked in sales, you understand the importance of setting goals and having a playbook. Similarly, a budget acts as your financial playbook. It tells you how much money you should be spending in any given category.

A budget is important because it gives you a big-picture view of your needs. When you build a budget, it’s important to remember that the budget can be anything you desire. For example, you can establish goals for the bare minimum of expenses or build a plan that allows you to go out to dinner once a week.

Either way, the important thing here is the actual act of building the budget. Far too many Americans have very little financial literacy. By building a budget, even if you don’t stick with it, you’ll be one step closer to better understanding how your finances work.

2. Keep the coffee, but cut back

Many financial health articles focus on eliminating coffee from your daily routine, but a better option is to think about how you spend money on coffee. Cutting back on how much Starbucks you buy can be a great step, but it doesn’t mean you have to quit drinking your favorite cup of java. Brewing coffee at home or buying pre-brewed coffee from the store can help save a lot of money.

Of course, coffee isn’t the actual issue here; the main goal is to eliminate excessive spending. Whether it’s buying a soda at the gas station or a candy bar when you check out, all of these things add up. These habits are often hard to break, but if you can find a different way of feeding your cravings, you’ll also save some money.

Try thinking like an accountant and use a profit and loss statement template to understand better how you’re spending money and how much you’re earning.

3. Evaluate your financial security

Most successful people evaluate their financial security, so why shouldn’t you? Evaluating your financial security is an important resolution that you can keep. This means evaluating how secure your income is and how likely your expenses are to stay the same or change.

Another important component of understanding your financial security is to examine trends. For example, have your expenses been rising? Are you putting more charges on your credit card? All of these things could be signs that you’re spending too much.

Finally, look at your savings. Earlier I discussed the importance of building a savings plan. If you don’t have one or contribute very little to your savings plan, both could be signs of poor financial security. Either way, simply determining your financial security can be a simple and effective resolution.

4. Create a savings plan

If you’re already financially secure, it’s time to start protecting your savings. Many people consider life insurance one of the best ways to protect their income. Creating some type of savings plan operates similarly to a budget. Even if you’re unable to commit to saving money, simply building a savings plan can help put you in the right direction. Saving is one of the most frequent financial resolutions. However, an easier resolution that you can keep is building a savings plan in the first place.

5. Find a side gig

Finding a side gig can be a great way to generate additional income for yourself and your family. A side gig can be just about anything, but many service industry jobs are currently hiring. Picking up a few shifts during a week part-time can be an excellent way to earn extra cash.

The main benefit of finding another source of income is it creates a definite goal. Financial goals are often hard to keep because they aren’t concrete.

6. Meet with a financial professional to plan your financial future

Another simple goal you can set is to schedule a meeting with a financial professional. Whether a certified public accountant (CPA) or a licensed tax professional, meeting with an expert is an easy first step in building a healthy financial future.

A tax professional can help you find deductions to save you money on your taxes this year too. These professionals are an invaluable resource of information because their entire job is dedicated to financial well-being. This goal is probably the easiest and most achievable of any on this list.

7. Be persistent and stick with it

The final goal and the most important to keep in mind is to be persistent in your endeavors. Persistence is one of the key drivers of success, and it’s the main reason other people become financially secure. For example, actor Robert Downey Jr. was extremely troubled and had little to no money before his success in film. Sometimes, failure is the first step on the road to success.

By being persistent with your financial goals, you can continue to develop your financial literacy. Over time, these goals will become beneficial habits that you keep every day.

Wrapping up your financial resolutions

Most of these resolutions focus on creating and following specific types of financial plans for yourself. Building these plans and then following through on them are some of the simplest and most effective ways to build greater financial health this year.

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HOW FINANCIAL REPORTING AFFECTS CONSUMERS

It’s not part of Marketing 101, but the next uptick in your firm’s sales could be in the days after its earnings announcement. In the 10 days after an earnings announcement, publicly held firms see an average increase of 1.1% in consumer footfalls at their brick-and-mortar stores and in online sales, according to a recent research paper by Wharton accounting professor Christina Zhu along with Stanford University accounting professor Suzie Noh and MIT Sloan School professor of management and accounting Eric C. So.

The paper, titled “Financial Reporting and Consumer Behavior,” noted that the footfall increase is more pronounced for firms with “extreme negative or positive earnings surprises that are more likely to garner coverage from the financial press.”

The upshot of the research is that “earnings announcements serve a marketing function by drawing attention to firms, and that a byproduct of the financial reporting process is that it shapes consumer behavior.” The paper added that it “yields important insights for research on investor attention, consumer behavior, and recurring events.”

According to Zhu, the study has implications for the fundamentals of firms as well. “If consumers pay attention to financial reports, then the firms that create these reports and decide how to disseminate them should know that, because that can actually impact how well the firm does in the long run,” she said. “It’s another form of marketing.”

“If consumers pay attention to financial reports, then the firms that create these reports and decide how to disseminate them should know that.”–Christina Zhu

One telling case study in the paper tracked fashion retailer Ralph Lauren’s average store visits after its earnings announcement on July 31, 2018. Consumer foot traffic at Ralph Lauren stores increased in the week after this earnings announcement, where the company beat the analyst consensus with “a positive earnings surprise,” the paper stated. That uptick was short-lived and partly dissipated shortly after, suggesting that the announcement triggered “a transitory increase in consumer activity.”

While Ralph Lauren reported a surprise earnings bump, the paper also found increases in store-level foot traffic for firms with negative earnings surprises. “Those firms get a lot of attention from the media when they have worse-than-expected earnings,” Zhu said.

Specifically, the research found that daily store visits on average increased by approximately 2% during the 3-6 day period after the announcement, and by 1.6% during the 7-10 day period after the announcement. “Firms with larger upticks in post-announcement foot-traffic subsequently report higher sales in their next earnings announcement,” the paper stated.

Those findings were based on a study of GPS coordinates of consumers’ smartphones across the U.S. between January 2017 and February 2020. The main data sample covered 50 million observations of foot traffic at 223,943 unique establishments over three weeks surrounding 2,485 earnings announcements by 222 firms. The firms in the sample were mostly in retailing (63%), accommodation and food service (22%), and wholesale trade (8%).

The store-level data came from SafeGraph, a provider of global data on consumer traffic at physical locations; it tracked about 13% of the U.S. population. For tracking online sales, the study used transaction data from Comscore, a media measurement and analytics services provider.

The findings revealed a relatively small uptick in foot traffic. “We don’t expect the uptick to be large, because it’s important to think about who the financial reports are going to affect,” said Zhu. “It’s going to be people are reading financial news or see financial news on social media. Out of that set, the consumers who change their behavior likely have the disposable income and time to change their shopping. They don’t necessarily read the announcement of the firm directly, but they could be reading The Wall Street Journal or browsing their Twitter feeds.”

Linking Consumer Activity to Earnings Releases

In deciding to undertake this study, the authors were motivated by the idea that firms get increased attention when they make earnings announcements. “Consumers are attention-constrained and should be more likely to visit stores of brands they recognize and can easily recall to mind,” the paper stated. “Therefore, they may patronize businesses that are more salient due to increased attention that accompanies earnings announcements.”

In addition to exploring the relationship between consumer activity and the financial reporting process among publicly traded firms, the research also highlighted the “feedback effects of the financial reporting process,” the authors noted in their paper. That may hold a cue for firms to leverage their earnings announcements in new ways. “Specifically, our results suggest that consumers increase consumption activity for firms with more attention-grabbing earnings news, indicating that managers may prefer to spotlight their earnings news as a means to increase subsequent consumer activity,” they wrote.

Firms do not appear to be directly using earnings announcements as sales triggers. “What we don’t think is going on is firms timing national advertising campaigns with the earnings announcement,” said Zhu. The authors analyzed data from Nielsen Ad Intel, “and we don’t see any uptick in national TV ads around these earnings announcements,” she added. However, she noted that “personalized or retargeted advertising likely indirectly increases around announcements, as consumers paying attention to earnings increase their Google searches for the announcing firm and see ads as a consequence.”

“[It’s] important to think about who the financial reports are going to affect.”–Christina Zhu

Prior research has explored the impact of earnings announcements on investors, managers and regulators, but research that links financial reporting and consumer behavior is scarce, the paper noted. One reason for that could be that most financial releases provide firm-level sales data at “low frequencies” such as quarterly results, it added. But the paper’s authors overcame those challenges by using data that provided a high level of granularity, revealing variations in consumer foot traffic daily and by geographic location.

For instance, the data could reveal how many individuals visited the Best Buy store on East Charleston Road in Mountain View, California, on a given date and the average duration of their visits, the paper pointed out. For some tests in the study, the authors used U.S. Census data on county-level demographics. “The census data allow us to observe that likely consumers located near Best Buy in Mountain View are predominately college educated or above and affluent,” they wrote.

Noteworthy Sub-trends

Zhu and her co-authors found several noteworthy trends in parsing the data. Significantly, the higher foot traffic was concentrated in areas having a greater representation of English-speaking households. This finding showed that “financial reporting disproportionately affects foot traffic in populations more likely to consume financial news,” the paper noted. Consumers in areas with moderate levels of education and income also exhibited that trend, suggesting they “likely have highly elastic demand for the products and services of our sample firms and therefore are more likely to respond to their earnings news,” they wrote.

According to the authors, their study is “among the first to show heterogeneous effects of financial reporting across populations based on race/income/education, suggesting that financial reporting shapes consumption by disproportionately impacting populations more likely to consume financial news.”

The increase in consumer foot traffic was also higher for firms that sell durable goods like cars or household appliances and reported strong financial positions. “Our results suggest consumers update their expectations about firms’ solvency based on financial reports and adjust their behavior accordingly,” Zhu and her co-authors wrote. That finding is consistent with evidence in prior research that consumers avoid buying durable goods from firms that may not be able to provide warranties, spare parts, or maintenance, they added.

According to the paper, the findings also address questions about the role of other factors in those foot-traffic increases. One, since higher foot traffic after earnings announcements results in increased quarterly consumer purchases, it is clearly not a pulling-forward of sales that would have taken place further into the future. Two, they mitigate concerns that the increased foot traffic is driven by employee stock grants by firms sales events or promotions; they also “do not appear to be explained by variation in advertising campaigns coinciding with earnings announcements.”

The SafeGraph data has some inherent limitations such as its coverage of only consumers with smartphones and those that may visit brick-and-mortar stores, the paper noted. The study also dropped firms in industries where consumer visits are not likely to be discretionary, such as utilities, finance, agriculture, health care and pharmaceuticals.

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thefintech.info

4 FINTECH LEADERS OUTLINE 4 KEY TRENDS FOR 2022

Amidst a backdrop of economic uncertainty, the global Fintech ecosystem experienced unprecedented growth in 2020. Then, in 2021, the space reached new heights of innovation, with Fintech companies raising more than $140 billion, three times higher than that of 2020, setting an all-time record. The record-setting trends of 2021 were also mirrored in Israel’s rapidly maturing fintech ecosystem, which experienced a 3.5x growth in investments and an exceptionally high number of new unicorns and publicly traded companies.

Over the past 12 months, we’ve witnessed financial incumbents innovating and adding new solutions to claim their slice of the fintech pie. We’ve also seen top fintech players bundling and adding new value propositions to keep customers in their ecosystem and significantly grow their market share. This has created a reality in which, just like post-2008, power has become increasingly concentrated in the hands of industry giants – only this time around, the primary beneficiaries were non-traditional financial players, namely big tech. However, with growing demand for decentralized financial services and a new version of the internet, Web 3.0, the financial services landscape appears to be on the verge of another major shift. In the coming years, it’s quite likely we’ll see a fresh wave of fintech innovation usher in a new era of greater financial autonomy, customer-centricity, and empowerment for individuals.

With these market dynamics in mind, let’s look at what fintech experts have to say. Here are four key trends and opportunities that are on the table for businesses in the year ahead.

Embedded solutions: the key to unlocking fintech’s future

Within the financial services landscape, the center of gravity has shifted over time, largely in response to consumers looking for solutions that cater to their needs, outside the clutches of big incumbents. In recent years, neobanks have attempted to answer this call, challenging the pricing and complexity of traditional banks, while earning customers’ trust through simplified, digital-only experiences and low-to-no fees. Neobanks have enjoyed a modicum of success, particularly in niche verticals where they offer dedicated products for specific personas. Overall, however, they have had a difficult time with mainstream customer acquisition and have yet to be profitable at scale.

It can be argued that the current trend of democratizing financial services holds even bigger potential for disruption. Embedded banking solutions, aided by open banking initiatives, are uniquely positioned to overcome customer acquisition challenges, with the clear benefits of providing financial services where there is already a captive audience of customers. Doing so enables any company – financial or non-financial – to expand their native offering, create new revenue streams, and better serve customers across their ecosystem. Banking-as-a-service offerings are just the beginning. There is far more room for growth within the embedded finance movement.

While embedded payments and lending solutions are already available in the market, embedded insurance offerings are now beginning to establish a foothold. Shopify is a great example of a company that has adopted an embedded finance go-to-market strategy, and it’s paying off. They’re providing e-commerce businesses with a comprehensive suite of solutions to accommodate all their financial needs under one single roof. When it comes to the big picture outlook on the future of the fintech landscape, we can expect to see more companies embrace an embedded finance business model and also the expansion of embedded finance in more verticals like investments and taxes.

Supply chains are at a tipping point

The COVID-19 pandemic has exacerbated pressures within the global logistics space. Intermittent periods of forced closure, travel restrictions and pandemic–induced bursts of consumption, alongside a limited capacity of ports, container ships, and truck drivers, caused havoc for supply chain operators. Due to the current supply chain chokehold, only about 34% of container ships arrived on time in September 2021, compared to 56% the year before. This unprecedented congestion makes fleet management nearly impossible. In addition, rising consumer demand, limited supply, and uncertainty around delivery times are causing crazy, volatile price increases. This reality of protracted delivery timeframes and abnormally high and unpredictable transportation charges simply isn’t sustainable.

Here’s one for you. How many companies does it take to move just a single shipment? Well, about 20. That’s right, about 20 companies – ocean, air and ground carriers, freight forwarders, ports and airports, and customs brokers. What was already a highly fragmented industry is now at a tipping point. Without unified infrastructure in the industry, the level of connectivity between players is low, particularly in ocean transportation but also for trucks. This causes little to no real-time data flow, not enough visibility around container location, and ambiguity around estimated arrival times. In addition, companies in the logistics industry typically insist on cash against documents and are resistant to using digital payment systems that could provide meaningful efficiency gains.

The industry imbalances listed above can impact any importer. High transportation costs not only affect an operator’s bottom line but are also an important factor in any business decision. Moreover, the instability and insecurity around arrival times are forcing importers to rethink all their inventory management strategies. In the coming years, we will see a flourishing intersection with fintech – from payments to lending and insurance. We believe we will see the industry’s infrastructure get rebuilt for freight forwarders, providing new solutions to improve visibility and enhance transportation predictability.

Mainstream use cases for NFTs

NFTs (Non-fungible Tokens) have become commonplace in modern-day vernacular thanks, in large part, to bizarre images of bored apes fetching for jaw-dropping prices. A sign of the times perhaps. But NFTs aren’t a reflection of society’s descent into idiocracy. Quite the contrary — there is huge potential here. Already, many artists, musicians and other entertainers are using NFTs to strengthen their earning power with digital representations of their content. This is an area to keep an eye on, for the potential of NFTs extends far beyond that of a digital zoo. Research suggests that 96% of Americans don’t understand the basics of NFTs, crypto, and DeFi; clearly the current focus on digital art isn’t translating to the everyday user. Other use cases will be key to the mainstream adoption of NFTs, part of which will see their deployment within the experience economy. Let’s take concerts as an example.

In the live music scene, profiteering by scalpers who buy up tickets exclusively for re-selling at higher rates on the secondary market has always been a major issue. Concert venues don’t want to be selling a ticket for $50, for it then to be sold on the secondary market for $300, where they don’t receive any spoils on the re-sale. If a royalty mechanism – represented as an NFT – is built into the ticket itself, the venue and artist can receive a fair share of the commission on tickets sold in the secondary market, a win-win situation. NFTs can ensure royalty distributions are always aligned with the interests of the concert venue and musician throughout the ticket’s lifecycle.

Looking ahead, the potential for NFTs to transform the music and entertainment landscape is boundless. We could see bands creating NFTs around a specific piece of work and releasing it as a limited-edition album with a finite number of copies available. In addition to providing fans with exclusive access to content, artists can ensure that profits aren’t being siphoned by middlemen. Once the infrastructure is in place to facilitate NFT-driven streaming, digital content providers will be prompted to rethink their business model. As powerful new tools for creator empowerment, NFTs can help democratize content distribution globally, elevate culture over corporate interests, and forge stronger connections between artists and their fans — a vision worth going ape over.

Super Apps: The new holy grail of fintech or the wrong bet?

2021 was a record-breaking year for VC investments and capital markets in fintech. We’ve even seen fintech companies acquiring other fintech companies – PayPal recently acquired Paidly for $2.7 billion – which demonstrates the ongoing maturity of the space. With growing competition and high customer acquisition costs, mature fintech players (Block, Klarna, Stripe) are focusing on selling new services to widen their appeal and drive revenue. By acquiring other fintech companies themselves, and gradually offering more services, they are on the path of becoming a Super App – in which platforms provide seamless access to a comprehensive range of tools and services that can accommodate everything a customer needs, without having to leave their ecosystem. Fintech platforms are also advancing their all-in-one ambitions by embedding third-party services that lie beyond their core offering – solutions for taxes, accounting, commerce, crypto and more.

An example of the Super App movement can be seen in Block’s (formerly Square) expansion into BNPL services through the acquisition of Afterpay for $29 billion, as well as in Tax solutions with the acquisition of Credit Karma Tax business. Continuing in this vein, Block is creating a DeFi platform based on Bitcoin, and investing in other in-demand services. But the most noticeable move is the decision to change its name to Block, so the “Square” brand will be reserved for the merchant-payment business, while Block will be the super-app name. Another relevant example is PayPal. It recently launched an app that includes savings and bill paying functionality, while allowing customers to benefit from shopping and loyalty programs. Additional features are likely to be rolled out in the future, and other companies such as Affirm, Revolut, and Klarna are adopting similar strategies.

API as a Service has made it easier than ever before for platforms to integrate new services. The Super App concept isn’t just being embraced exclusively by financial players, but also by non-financial companies that are keen to better serve customers within their ecosystem. The success of the Super App movement might not be as prolific here as in the Far East – where it originated – due to the sheer volume of competition, but it has massive potential to take hold. Instead of educating customers to download a new service or change their habits, we will see the FI industry continue making its services available where users are already – such as on social media and e-commerce platforms.

In 2022 we can expect that fintech companies will be battling even harder to become the centrepiece of consumer lives by embracing the Super App model and embedding more services into their apps. But one might ask whether they are best suited to succeed with this strategy. Or maybe we can expect the super app trend to be won by e-commerce players and social media platforms, which are already super-serving their users with a broad range of in-house financial services.

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ECONOMIC OUTLOOK 2022

Global growth should remain robust but uneven, with the rising divergence between advanced and emerging market economies. However, just like in the eponymous movie, whose title we borrowed for this report, current growth dynamics might keep us from looking up during the current phase of the recovery.

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