Fintech Developments: How AI and ML Will Impact Finance Next Year

2021 was a year marked by the implementation of the rapid digital transformations that began accelerating when the coronavirus pandemic first hit the world in 2020. Fintech firms and other businesses around the world invested heavily in transforming to meet the needs of the new normal—remote working, social distancing, and a business world changed perhaps forever. 

Now, as we move into 2022, it’s clear that those developments are here to stay. Trends are fast becoming industry standards and there is a reinvigorated focus on consumer-friendly tech. Naturally, AI (artificial intelligence) and ML (machine learning) are at the heart of this, and it comes as no surprise that the industry is predicted to be worth over $17,440 million with a CAGR of 17.9% by 2027. The only question is, how will companies use these tools to implement digital transformation and more importantly make it count? 

Into the future—fintech trends for 2022 and beyond?

As we move forward into 2022, let’s take a look at some of the top ways AI and ML are transforming fintech today and in the future.   

Data analytics becomes more than just statistics 

Over the last few years, the value of data has been growing. Armed with the right knowledge, companies can seek to ‘hack’ the market and improve their offerings to suit consumer demand. It’s estimated that by 2025, more than 180 zettabytes of data will be in existence. Two years later, by 2027, the data market is set to be valued at over $103 billion. But what does this actually mean for companies? 

In short, it means that companies will invest heavily in unlocking and understanding the data they have and seek to acquire more to make smart business decisions. However, it’s not just the quantity of data that matters, it's the quality of the analysis that counts. Investments in consumer behavioral analysis are set to rise and there is a renewed focus on gaining a deeper understanding of the current market. 

Conversational AI enhances client engagement

Alongside knowing what your customers want is communicating with them. Nowadays, consumers expect response times to be faster and more convenient to them—no more office hours, 24/7 communication is the new normal. However, for many businesses, it’s almost impossible to ensure round-the-clock communications, and this is where conversation AI is coming in. 

With a 3,150% growth rate in terms of successful chatbot interactions between 2019-2023 (estimated) and an estimated 862 million hours saved for businesses in the future, it’s clear that chatbots will transform how business communication is done in the future. Conversational AI is transforming chatbots from a stopgap in consumer communications to a genuinely useful tool to help consumers, and this is something we are likely to see more of in coming years as AI techniques are able to make chats more ‘human.’ 

Module-based solutions gaining traction

In the past, to develop any sort of tech solution, a business would need a team of IT specialists to take charge of every element from inception to implementation. Now, all that is changing. Low and no-code module-based solutions are gaining popularity due to their potential to offer clients the ability to customize software without having to develop a fully tailored solution. With a predicted revenue generation of $187 billion by 2030, giving it a CAGR of 31.1%, Gartner estimates that over 65% of organizations will use low/no-code in the future, which will speed up development processes, increase time-to-market, and make adapting to industry changes so much faster. 

Influence of the Metaverse (Web 3.0)

Ever since Facebook changed its name this month to Meta, the metaverse is all the world can talk about, and it’s not without good reason. While by and large, we are unsure precisely how the Metaverse, a shared virtual space, will look in 2022 and beyond, there are some things that fintech firms should watch out for. Crypto, NFTs, and digital tokens are taking on a whole new life, and the way finance is done online is changing. Facebook’s name change could prove more than just a rebranding but instead suggests a much bigger development is at hand.

What areas of fintech should companies focus on in 2022?

As we move ahead and plan for 2022 and the future, it’s essential that companies start planning their digital transformations now before it’s too late to catch up to their competitors. 

To choose the technologies that will reinforce your business in the future, the best thing to do is start strategically planning how this technology will fit in your overall business plan. Analyze your business processes and use smart Big Data to discover how you can improve, and meet your consumer’s needs. The future will no doubt be data-driven so this is a good starting point for any business seeking to digitally transform. That said, I would encourage any business not to be led by short-term trends, but to focus more on the growth dynamics that we have been seeing, and a sustainable business future.