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The Indian finance sector has grown in leaps and bounds recently. India’s financial industry is seeing a growth of approximately 8.5% annually. The acceleration of the growth rate is consistent with the expanding size of the economy.
Over the last several years, changes that apply to monetary and macroeconomic policies have been implemented. The nullification of the laws that restricted the expansion of the financial sector in India was the most significant move toward opening up the financial industry even more.
As such, studying the recent trends in financial markets and looking out for possible financial trends is crucial to your business’s growth and development.
Let’s look at the top emerging trends in finance that you should look out for in 2023!
Embedded finance is quickly becoming one of the most important emerging trends in the finance business. In its most basic form, embedded finance refers to the provision of banking and other financial services by entities other than banks.
There will be an increase in the availability of embedded financial choices, such as digital wallets, private credit cards, and lending facilities, in 2023.
Millions of people in India are rapidly turning to BNPL as their preferred method of obtaining loans. This industry had astonishing growth of 637 % in 2021, reaching an anticipated market size of 3.7 billion US dollars.
BNPLs, or small-ticket loans, provide customers the financial flexibility to buy various goods online and in-store. They can purchase things in advance and make payments for them later as long as they do so within the time frame that has been established.
BNPL payment methods are projected to increase at a startling compound annual growth rate of 54.3% between 2022 and 2028. This indicates that the Gross Merchandise Value of BNPL, projected to be USD 3.7 billion in 2021, will skyrocket to reach USD 93.5 billion by the end of 2028.
According to the EY analysis, financing for Indian neobanks increased 5 times in the previous year, and the amount is projected to reach $215 billion by 2023. Traditional banks have also seen the advantages of working with neobanks to drive business.
Without a legal framework for digital banking licenses, such collaborations will generate a range of hyper-personalized financial products and services. Undoubtedly, it is one of the most popular financial technology trends to look out for.
Wealthtech is another fintech trend that should be on your list. Fintechs that simplify mutual funds, equities, peer-to-peer investing, and everything in between is well-positioned to democratize wealth management services via AI-enabled tailored advisory services. Better access to banking services is expected in India due to hyper-personalized financial products and the country’s increasing digital penetration.
Although there are heavy taxes on cryptocurrency usage in India, this economic pattern will improve next year. The e-rupee project is India’s first effort into digital currency, spearheaded by the government. This is excellent news for investors since it establishes a foundation for developing electronic currencies and crypto-like investments.
RegTech, or Regulatory Technology, can help the financial sector meet rising regulatory requirements. The Indian government’s “Digital India” strategy emphasizes RegTech. The nation is ready to go digital. Financial compliance solutions will progress significantly. In 2023, it’s possible that even bigger loans, like mortgages, will be processed digitally.
Indian alternative investment funds have grown fast. As of May 2022, there were over 900 SEBI-registered AIFs, and the sector is expanding at 25% CAGR. It’s time to prioritize alternative investments in India due to their huge potential. AIFs may be a modest part of the investing landscape, but they are growing fast.
In the previous five years, digital lending has received $9 billion in investments, and the EY research predicts a $515 billion book size by 2030.
Consequently, the RBI is concerned about the banking sector’s capacity to service expanding credit demand while preserving capital buffers due to loan disbursal growth outpacing deposit growth. The Account Aggregator framework and AI-driven credit evaluation will let fintechs efficiently provide credit where required, making it one of the essential technology trends in financial services.
75% of under-40 investors choose ESG investment. ESG objectives necessitate digital tools and blockchain solutions for carbon credits and offsets at many financial organizations. Banking will use crypto frameworks to solve complicated challenges like ESG, making it one of the latest trends in finance.
The contemporary market is primed for product and platform innovation since a huge sum of money is chasing a relatively limited number of digital capabilities.
Revenue-based finance, often known as RBF, refers to a financial model that allows a company to obtain cash in exchange for a proportion of the company’s total gross sales. It is a speedy method for start-up companies to get the needed cash while maintaining complete control over their company. This business strategy has been more popular among new companies over the last year or two, and its usage is expected to increase in the future.
As a business, it’s important to keep up with not only the current financial market trends but also keep an eye out for new trends in finance, for they may significantly impact your business, determining its profit and loss.
We are optimistic that after reading this blog, you now know the top new trends in finance to look out for in 2023. However, if you still have any doubts, it’s best to talk to an expert accounts company like GJM & CO. Our experienced accountants will walk you through these trends, tell you what you can expect as a business owner, as well as help you prepare for them.
Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.in.