Marble payment and fintech predictions for 2023
As the year 2023 begins, we’ve decided to have a look at what’s to come for fintech and payment in Europe.
We’d love to hear your thoughts on our payment & fintech predictions for 2023!
Please reach out to us at contact@checkmarble.com
#1 Payments are becoming instantaneous, and transaction monitoring will follow suit.
- The European Union (EU) has pushed for increased adoption of instant payments within Europe, offering both regular SEPA transfers and instant SEPA at the same price. We anticipate a strong rise in this new payment method by 2023, due to the benefits it provides to both consumers and businesses.
- However, with instant payments comes the risk of instant fraud. The irrevocability of instant payments makes it a desirable target for fraudsters. In this context, current compliance and risk processes are inadequate mostly because they are too slow and manual.
- As instant payments become the norm, banks and fintechs will have to adapt by reviewing, scoring, and validating transactions in real time. To save time, they will also need to increase the volume of decision automation.
#2 No fintech will be able to operate without a robust fraud and compliance tooling.
- Across Europe, scrutiny of Fintechs is increasing, especially as Fintechs have grown their customer base in recent years, impacting more people’s lives.
- On top of that, regulators are becoming more efficient thanks to new internal tools, big data technologies, and teams of well-trained data scientists.
- The regulatory landscape is evolving with a trend towards the reinforcement of regulations (cf the example of increased Anti-Money Laundering and Counter-Terrorism Financing expectations across all EU jurisdictions).
#3 Financial institutions will have to be more cautious when choosing their providers, requiring a PSEE classification.
- Regulators are becoming increasingly demanding when it comes to the service providers that fintechs and financial institutions choose to work with.
- They expect specific contract provisions, including a strong audit right, traceability and oversight, as well as a high level of security for subcontractors.
- There’s also an increased pressure from the regulator to monitor and review the security level of essential subcontractors and the data they can access. On top of that, new regulation (CADA) is being set up.
#4 FinTech stack will finally become a technology stack, driven by APIs, with a wide range of services to choose from.
- Thanks to fintech infrastructure companies, launching a fintech company and embedding financial services into software products will become much easier.
- Instead of having to choose a single, monolitic provider, companies now have to ability to mix and match their stack between a wide array of specialized solutions, for both product and process needs.
#5 Social engineering fraud will continue to rise, resulting in greater losses.
- AI makes life easier for everyone including fraudsters, allowing them to conduct social engineering scams at scale
- As financial institutions implement better security practices and deploy two-factor authentication, the end-customer becomes the most vulnerable point to set-up scams.
#6 Better loss control will be a key factor for gaining a competitive edge in the current economic climate.
- Risk is a serious cost-reduction lever for financial institutions. It is obvious that fraud costs money. But treating a large volume of alerts also generate high operational costs.
- Not to mention the potential implications of non-compliance and fraud from a reputation perspective (cf the recent $100M settlement of Coinbase with the New York Regulator)
- Investing modern and flexible compliance software as well as automating certains decisions and processes, will allow fintech companies to become more cost efficient.
