Mambu predicts embedded finance spike in 2023
Cloud banking platform Mambu has predicted a spike in the use of embedded finance in 2023, as more companies seek to integrate financial services.
The firm has also predicted that big tech will move into banking, which could force banks to drive digital transformation.
Embedded finance is set to increase, thanks to its ability to offer innovative, convenient and cost-effective solutions, according to the report.
In the coming year, Mambu said that customers can expect to see companies using embedded finance to integrate financial services in non-bank products and business processes, while banks will use it to court the custom of small and medium-sized enterprises.
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Customers will have higher expectations for their digital experiences, so traditional banks will need to partner with technology providers to offer more competitive banking services.
Environmental, social and governance and ethical impact finance will also drive traditional banks towards more inclusive financial products, with sustainability in mind for the benefit of their customers
Mambu has also predicted that the future of payments will mean that banks will have to focus on creating their own interfaces and making them more engaging and relevant, to increase brand loyalty.
Digital e-wallets are set to grow, as well as innovation in stablecoin, while new approaches to AI are expected to separate out the fintech herd.
Contactless payments will also gain momentum. Mambu has pointed to the ‘super apps’ that are already dominating the Asian market and predicts their rise around the world in 2023.
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In response, banks should be looking to create their own engaging interfaces for consumers as well as finding ways to monetise their products and app traffic.
“An increasingly cashless world also opens up opportunities for companies to expand across borders, although customisable integrated platforms will be needed to support this”, the platform said.
Finally, compliance and regulation will remain key in 2023 due to the rise of Web3 and enhanced Financial Conduct Authority guidance.
Creating a regulatory framework will be key to unlocking the power of Web3 within finance and facilitating institutional adoption. The industry should expect a consolidation of compliance coverage available to fintechs, the report warned.
“The financial landscape has been extremely turbulent for some time”, Mambu chief technology and product officer Fernando Zandona said.
“Economic uncertainty, big tech companies redefining the financial services space, fintechs looking to be more nimble and efficient, banks looking to reinvent themselves, there is a lot going on.
“But no matter what, it is going to be the end customers who decide which players win and continue in the market, and these customers will favour those who move fast and innovate. Embracing technology will be one of the top approaches that financial services will need to survive and thrive.”
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