After more than a decade of growth, the technology sector and the economy, in general, are preparing for a historic economic decline.
While fintech is no exception to the changeability, there remains appeal from both investors and consumers in tech-enabled financial tools.
There have been a handful of ‘trends’ that Ampla has seen take form throughout 2022 that are likely to persist and push the pace of the industry beyond other tech sectors in 2023.
Speaking to Sagar Patel, VP of Engineering for Ampla Technologies, he says, “We’ve learned a lot from our customers and what their needs are outside of access to capital or at least had a supplement for access to capital, so our flagship product has been our growing line of credit.
“We also offer banking services, integrated accounts, and payable solutions, meaning the ability to pay on the platform as the ability to extend payment terms on the invoice-by-invoice basis.”
Ampla has narrowed it down to four predictions
- Embedded Finance. Allows you to pay for a purchase online without entering bank details or instantly take out a consumer loan on digital platforms outside banks, among many other options.
Patel explains that “embedded finance space can make an otherwise disjointed user journey seamless for both the consumer and the business.”
“From a consumer side, embedded finance can take the shape of a buy now pay later product, but from a business side, there can be things like embedded line of credit applications, right at the point of entry that business might need.”
“I expect embedded finance to continue to grow significantly outpacing others within the fintech space, due in large part to the relative ease of implementation and the demand for the services, really is what it comes down to. “
- Debt Financing. One of the types of financing in which entities like companies obtain finance by issuing debt instruments or borrowing money from sources like a bank. The funds are used to finance working capital, buy resources, and business expansions.
An influential gauge of a shrinking economy is the belt-tightening of wallets. Loss of purchasing power and increased consumer risk disclination lead banks and venture capitalists to restrict access to capital. Retail and e-commerce businesses will look to shorter-term solutions to bridge the financial gap between paying for inventory and selling it.
Patel says, “I expect rapid growth beyond traditional online retail and into other consumer financial services such as insurance and Treasury.”
“Certainly, it’s an expected growth driver, especially as companies are capital providers, those that have operated very leanly and have been a little risk averse through the good times and now into the economy we find ourselves in.”
“I think drying up capital markets should be the general capital markets by traditional lenders. We’ll see an increase in the need for capital. But the kind of smaller players who have operated very non-recklessly and in a lean manner can service those, those companies will still be a bit risk averse, but the demand will certainly be there.”
- Buy Now Pay Later. (BNPL) a type of short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. Also referred to as “point of sale installment loans,” BNPL arrangements are becoming an increasingly popular payment option, especially when shopping online.
“In BNPL, we see a lot of value. I still have a lot of faith in decentralized finance despite fraudulent activities of major players in the space over the last few months,” says Patel.
- Bundled Services. Bundling is a fast-growing trend in the commercial sector. The term is applied when services previously purchased separately are consolidated and purchased from the same provider.
In conclusion, Patel says, “bundling services is where I see a lot of growth opportunities. Over the last decade, the almost ubiquitous availability of capital has led to this proliferation of startups looking to serve a very niche, specific customer needs.”
“Unbundling of services have happened over the last decade, in the consumer brand space, a founder or an operator now has many tools for, you know, a bill pay solution, a banking solution, a funding solution, or credit card, the counting, etcetera, invoice creation.”