Will Marwick, CEO of IFX Payments, looks ahead at the 2022 Fintech predictions and reflections.
2021 was the year of recovery and opportunity for many, following months of disruption caused by the pandemic. But whilst many industries have struggled to bounce back from the disruption, many FinTech’s have managed to thrive in a somewhat hostile economic climate due to innovation, digital disruption, lucrative funding and a vision for how products can change the lives of consumers whilst helping businesses grow.
From Marwick’s personal perspective, it’s been wonderful to see that as an industry, it has shown the continued resilience and ability to pivot to customer needs which has seen the likes of open banking and contactless payments boom in the wake of the pandemic. In addition, the agility and disruptive mindset of both established players and emerging disruptors meant that competition has only become fiercer, making everyone work harder and smarter, ultimately pushing the boundaries of what is possible.
Its therefore no surprise that UK FinTech funding more than doubled to US$11.4bn in H1 of 2021 alone, indicating investor confidence in the industry. This will pave the way for further opportunities to innovate and disrupt financial services for the better.
2021 for IFX was one of the best years to date since IFX inception in 2015. They’ve expanded their capabilities, worked with new partners and bolstered their team with great success. All of which they aim to amplify even further this coming year.
Looking forward at 2022, it’s important to consider the new emerging trends and movements set to shake up the industry and how IFX can play their part in what is set to be another trailblazing year.
Embracing FinTech Partnerships.
In 2022 the industry will see greater collaborations between services providers across a host of industries. Being a collaborator rather than a competitor is key to being successful in this sector as firms all look to identify a means of fitting into a modular ecosystem. As a starting point, every firm has to recognize that success comes from leveraging the strengths of others to amplify their own.
Firms must admit that they can’t be the best at everything and counter that by creating strategic partnerships that will reign supreme. Ultimately, collaborating with and embracing other specialists within the sector allows Fintechs to expand their capabilities and set themselves apart from competitors.
As the industry grows, to be the best in the field means not offering the cheapest cost or the tightest margin but integrating value-add propositions that make the product more appealing to its customer base. For instance, this year IFX have successfully partnered with Volt connecting IFX’s virtual IBANs with Volt Connect, allowing UK and EU-based merchants to realize the full potential of open payments.
Changing Consumer Payment Habits via Open Banking.
Open Banking was a hot topic in 2021, and firms know the work will continue in the space this year. While most of the work in the last year around Open Banking was rather conceptual, it paved the way for some innovative ideas and an enhanced customer experience.
Without a doubt, there are many benefits of Open Banking, settlement is faster, and rails are cheaper and arguably safer for customers but now it faces the challenge of encouraging customer adoption by competing with the convenient and simple UX of card payments afforded by smartphones and computers. As such, Marwick expects that changing the mould of how people make payments will dominate the majority of the conversation and work we do as an industry in the coming year.
IFX aims to set industry best practices through their regulatory expertise and ultimately break the mould of malpractice that has historically blemished the FX industry. Whilst regulation has definitely taken center stage and took over most senior level discussions, Marwick anticipates a greater focus on PSPs and EMIs, with both safeguarding and operational resilience being tested to ensure customer funds are adequately protected.
Being stringent in regulation is a way for payments and fintech companies to separate themselves from the pack. The FCA is also sure to take further regulatory action as they start to clear the covid backlogs, which in Marwick’s opinion, will be a welcome move to help combat some of the issues they have seen this year. Firms need to be sophisticated when making sure they’re compliant with regulations. Safeguarding client money correctly is a challenge requiring consistent attention, so they’re likely to see this as an obligation that firms invest in significantly.
Introduction of the UK Central Bank Digital Currency.
This is likely to be the door for many banks to embrace crypto-related technology. Blockchain infrastructure is an incredibly powerful tool that can revolutionize the industry through many features not limited to instant global settlement and transaction monitoring capabilities.
The hesitancy to embrace this infrastructure, alongside several crypto assets, appears to come from the dark web usage of old, where assets were used for illicit purposes and money laundering; but then again, so is cash. Ultimately, firms shouldn’t be afraid of the capabilities that this revolutionary development can carry due to the negative connotations. Instead, the focus in 2022 should be on education and equipping the industry on understanding the power of the blockchain so that everyone can understand the good that it can do, the risks it carries and how to mitigate those.
So What Now?
2021 saw great innovative strides taken in the payments and fintech industry, but as firms look ahead into 2022, it doesn’t look as if this cadence is likely to plateau. The industry will continue to adapt and grow to cater to the changes in consumer and business habits, and they’ll see Partnerships, Open Banking, Regulation and Digital Currency as key strategic milestones across the board. At IFX, they are constantly striving to be the best in their field and through partnering with other brands, tightening their regulation processes, and constantly educating themselves and others on developments in the industry, they look forward to experiencing even greater growth in 2022 and beyond.
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About IFX Payments:
IFX Payments was founded in 2005 to provide bespoke FX solutions to both corporate and private clients. With offices in London, Warsaw, Dubai and Australia, their success to date has been founded on bespoke payments & FX technology aimed at managing risk, providing robust advice and delivering effective global payment solutions.
The more recent development of their ibanq platform, a cloud-based technology solution with built in AI functionality, integrates their global network to offer mass payments in real-time, in addition to single IBAN, multi-currency accounts, trading and single payment functionality. The ibanq platform is gaining significant momentum with both existing and new-to-business clients by offering a frictionless and complete digital payments experience.