The Top 5 Financial Trends for 2023

Financial markets around the globe have been experiencing turbulence over the past few years. However, that’s expected to change as the world recovers from the effects of a global pandemic. New technologies are already changing the financial landscape, resulting in improved operational efficiency and higher cost savings.

Understanding emerging financial trends will help you stay ahead of the curve and allow you to make informed investment decisions in the long run. 

Emerging technologies like RegTech (regulation technology) are expected to play a pivotal role as we head into 2023. There’s also been an unprecedented rise in the use of BNPL (buy now, pay later) services, and demand is only going to grow in the future. 

That’s not all, however. Other trends, including the use of A.I.,  Here are the top 5 financial trends to expect in 2023.

1. Increased Use of Artificial Intelligence (A.I.)

Artificial intelligence (A.I.) has been used by banks and other financial institutions for some time now, but its use is expected to expand significantly over the next few years.

A.I. can help automate processes such as customer service inquiries or investment advice, allowing banks and other institutions to save time while still providing quality service to customers.

It can also be used for data analysis or fraud detection, making it a powerful tool for anyone looking to stay ahead of potential issues with their finances.

A.I Applications in Finance

One of the most popular uses of A.I. in finance is trading. A.I. algorithms can be used to analyze huge amounts of data quickly and make predictions about future market movements that are often more accurate than those made by humans.

This can help traders identify profitable opportunities or alert them to potential risks before they happen. Additionally, A.I.-powered trading systems are often faster than human traders, meaning they can react to changes in the market faster and with greater precision.

A.I. can also be used to help manage investment portfolios. By analyzing data from various sources such as stocks, bonds, commodities, and currencies, A.I. algorithms can quickly assess risk level and suggest optimal investments based on a given portfolio’s objectives.

2. The Rise of Digital-Only Banking

In the past decade, digital-only banking has seen an unprecedented rise in popularity. While traditional banks used to be the only option for investors and consumers, digital-only banks are now becoming increasingly attractive.

One of the biggest drivers behind the growth of digital-only banking is the proliferation of financial technology startups (fintech). These startups are leveraging cutting-edge technological advancements to provide innovative financial solutions to consumers and businesses alike.

Fintech companies like Venmo and Square have made it easier than ever before to send money and make payments online, while other companies such as Robinhood have disrupted the long-standing stock trading industry by allowing customers to trade stocks commission free.

Digital-only banks have some distinct advantages over traditional banks that make them more attractive for customers.

For one, digital-only banks typically offer higher interest rates on savings accounts, as well as lower fees for certain services like ATM withdrawals and account maintenance.

Additionally, many digital-only banks offer more features than traditional banks—such as real-time notifications when money is deposited into your account or access to budgeting tools—that can help customers manage their finances more efficiently.

3. SaaS Platforms Will Pave the Way for Greater Savings

Software as a Service (SaaS) is an application delivery model in which users access software remotely over the internet.

The software is hosted in the cloud and managed by a third-party provider. This means that users don't need to purchase hardware or software licenses or worry about installation or maintenance—all they need to do is pay for the service and start using it.

For financial companies, using a SaaS platform can be incredibly beneficial. These platforms offer several advantages over traditional on-premise solutions, including cost savings, scalability, agility, and security.

By utilizing cloud computing technology and eliminating upfront hardware costs, companies can save significantly on their IT expenses.

Additionally, since providers manage all aspects of their software solution—including maintenance and upgrades—companies don’t have to worry about incurring additional costs down the line.

These platforms allow businesses to scale up or down depending on their needs without having to invest in additional resources or manpower.

This makes them ideal for businesses that experience seasonal fluctuations in demand or those with limited budgets who need more flexibility when it comes to scaling up their operations.

For instance, many financial companies are now required to publish financial reports and statements in French-Canadian in Quebec due to Bill 96. Instead of hiring a team of translators in-house, using blended A.I. translation solutions can help companies save a significant amount of time and money the long run.

4. The Rise of “RegTech” (Regulation Technology)

RegTech stands for Regulation Technology. It is a form of financial technology (FinTech) that enables organizations to more efficiently manage the ever-growing number of regulatory requirements they must comply with. 

The goal of RegTech is to provide these companies with automated solutions that simplify compliance processes, reduce costs, and improve operational efficiencies. 

RegTech can benefit businesses in a variety of ways. For one thing, it helps them stay compliant with government regulations in an efficient manner. 

This can help minimize costs associated with non-compliance and also allow businesses to focus on more strategic initiatives rather than spend time manually managing compliance processes. 

The rise of regulation technology and associated solutions is likely to be a key trend going forward in 2023. 

5. The BNPL (Buy Now, Pay Later) Sector Will Continue to Grow

BNPL stands for “Buy Now Pay Later” and is a type of payment option that allows customers to purchase items now but pay for them later. 

It usually involves signing up with a provider (e.g., Afterpay or Klarna) who then facilitates payments over time. 

This type of payment option has become increasingly popular among consumers as it provides immediate access to items without having to pay for them all at once. 

The popularity of BNPL can be attributed to several factors, including increased consumer demand for more flexible payment options and the growing availability of digital solutions such as mobile apps. 

Additionally, many retailers have embraced BNPL as a way to attract new customers and increase sales due to its convenience and ease-of-use. 

As more retailers offer this type of payment option, more people are likely to use it which further contributes to its growth.  

2023 Promises To Be an Exciting Year for the Financial Sector

With increased adoption of artificial intelligence, machine learning, and cloud-based services, 2023 looks to be a very exciting year for the global financial sector. 

We can expect to see major advancements in data analysis & automation and financial technology as a whole, and an increased focus on regulation is also expected to improve consumer safety and improve investor confidence. 

Many financial organizations are also looking to leverage technology to reduce costs, such as with translation management. An increasing number of financial institutions are now leveraging A.I. solutions for translating documents to maintain regulatory compliance while maintaining cost efficiencies.

The Alexa Translations A.I. is a trusted solution for financial institutions throughout Canada, offering highly accurate legal and financial translation solutions. 

Reach out today to schedule a live demo and see how Alexa Translations A.I. can help your business. 

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