28 Mar 2023

Top 5 FinTech Industry Trends affecting the Financial Markets

The overall impact of FinTech innovation on Financial Services and financial markets has been nothing short of revolutionary. The way these spaces operate now is entirely different from a decade ago. And as FinTech continues to break new ground, the industry trends we see emerging almost daily will continue to have a transformative effect on the financial markets and players within the industry.

We explore the future of finance and technology, the digitisation of the Financial Services space, and the top FinTech industry trends to make waves in the financial markets in the coming years. 

Top 5 FinTech industry trends shaping the future of Finance

In today’s golden age of innovation, new digital technologies and solutions are regularly emerging that continue to drive digital transformation in the financial industry. These innovations influence how industry players like trading firms and hedge funds operate and how individual consumers interact with financial services providers. 

With these far-reaching effects in mind, here are the top FinTech trends to watch in 2023 and beyond. 

1. Embedded finance

By no means a new FinTech trend, embedded finance's popularity spiked due to the pandemic and changing consumer buying habits. More and more financial institutions are leveraging embedded finance to increase revenues.

Below are some of the critical ways embedded finance is enabling success in the financial markets:

  • Increased accessibility: Embedded finance enables financial products and services to be integrated directly into non-financial platforms like e-commerce and social media, making them more accessible to a broader range of consumers.

  • Improved customer experience: Seamless and convenient, embedded finance lets customers complete transactions within platforms they’re already using without switching to a separate payment app or website. This convenience and more significant opportunities for personalised service offerings can lead to improved customer loyalty.

  • Enhanced data analytics: Embedded finance has the potential to provide valuable data insights into consumer behaviour, spending patterns, and financial needs. This could help financial institutions to create targeted and customised solutions and to improve their risk management.

  • Cost savings and efficiency gains: By leveraging existing infrastructure and technology, embedded finance can reduce the costs and complexity of launching new financial products and services, increasing efficiency and profitability for financial institutions.

With the value of the embedded finance market expected to exceed $7 trillion by 2032, it will soon be worth more than the combined value of the world’s top banks, thus making embedded finance an avenue ripe with opportunities worth exploring for financial institutions.

2. Alternative financing

Offering funding solutions beyond traditional banks and the capital markets, alternative financing enables businesses and consumers to access financing products that aren’t bound by conventional requirements and limitations. For example, imperfect credit histories or being ineligible for traditional loans do not hinder alternative financing, making funding more accessible to more people. Examples include peer-to-peer lending, invoice finance, revenue-based funding and crowdfunding. 

Here’s how alternative financing can benefit the financial markets:

  • Diversification of funding sources: Because alternative financing allows companies to access funding from sources outside of traditional banks and capital markets, they can diversify their financing sources when more conventional channels are limited.

  • Faster funding: Alternative financing offers faster access to funding than traditional financing, which can take months to secure. This can be hugely beneficial for businesses and institutions subject to time limitations.

  • Reduced costs: Alternative financing can offer lower prices than traditional financing channels, allowing companies to keep more profits.

  • Increased competition: The rise of alternative financing has increased competition in the financial markets, which can provide better options for borrowers and investors alike.

Overall, alternative financing can provide benefits for companies seeking funding and investors looking for new investment opportunities, suggesting that it will soon play a prominent role in the future business ecosystem.

3. ESG initiatives

Environmental, social and corporate governance (ESG) is now more than a buzzword. As institutions and regulators increase their focus on ESG initiatives, practices like green financing are gaining momentum. This, along with the growing global demand for better alignment between environmental sustainability and economic prosperity, means that ESG is a FinTech trend that can’t be overlooked. 

As more ESG-focused FinTech solutions emerge, institutions that embrace sustainability will perfectly position themselves to benefit from both worlds' opportunities while being primed for rapid growth due to the global appetite for sustainable products and services. 

4. Blockchain technology

First used for the rapid transfer of digital assets like cryptocurrencies, stocks and bonds, blockchain technology is increasingly used across the financial services industry to improve the efficiencies of various processes. 

Here are some of the benefits blockchain offers the financial markets:

  • Transparency and security: Because it uses a decentralised system that eliminates the need for intermediaries, blockchain provides higher safety for financial transactions. Furthermore, the data entered on the blockchain is tamper-proof, facilitating better security, and its anti-fraud measures reduce the potential for manipulating trades, and risks for firms.

  • Faster settlements: Blockchain technology enables the almost instantaneous settlement of trades, which can lead to significant savings in time and cost for financial institutions, especially for trading firms where every minute counts. 

  • Cost efficiency: Blockchain technology reduces the costs associated with clearing, settlement, and reconciliation processes, thus eliminating operational costs and fees incurred by intermediaries like depositaries and custodians.

  • Increased liquidity: For traders and stock exchange participants, blockchain-based trading platforms enable the creation of 'smart contracts that automate the buying and selling of financial instruments. These contracts can be executed automatically when the required conditions are met, leading to increased liquidity in the market while simplifying the trading process.

  • Greater accessibility: Blockchain technology lowers the barriers to entry in financial markets, enabling smaller investors to participate in trading platforms that were previously only available to large financial institutions. This promotes more inclusive financial structures by facilitating a more open and distributed financial system.

The full potential of blockchain technology to address issues like high transaction costs, fraud, and data security risks is just starting to be realised. According to PWC, mass-scale adoption of blockchain across the global economy will be seen as soon as 2025. Additionally, as decentralised finance becomes increasingly popular, the adoption of blockchain to facilitate financial transactions will soar. 

5. RegTech solutions

Against increasingly complex regulatory requirements, the cost of non-compliance for financial institutions continues to climb. Luckily, RegTech solutions are also on the rise, giving the financial markets easier, more efficient ways to ensure their compliance. 

RegTech innovations help firms avoid multi-million dollar penalties and potentially detrimental reputational damage, and it also simplifies and optimises many internal processes pertaining to compliance. With the help of RegTech, institutions and firms can automate resource-intensive compliance processes, improve their data security and minimise the risks associated with financial crimes and fraud. 

Risks and opportunities for the financial markets 

The unprecedented growth of the FinTech industry and all the emerging FinTech trends seen as a result have presented a number of opportunities - and risks - for the financial markets. Being aware of these FinTech industry trends is critical to being able to take advantage of the growth opportunities they offer, as well as to minimise the potential risks associated with them. 

 FinTech industry risks worth noting 

  • Cybersecurity: While most FinTech innovations boast sophisticated security, increasing digital transformation in financial services also means increased digital risk. As security solutions become more advanced, so do the methods and approaches of bad actors. As such, with the adoption of FinTech trends, financial institutions need to keep cybersecurity top of mind to avoid risks like hacking and data breaches.

  • Macroeconomics: The rapid pace of technological change due to FinTech trends and the disruptions these cause can have broader economic implications that can affect the financial markets. As economic indicators become increasingly difficult to apply to the digital economy, the risks associated - including increasing indebtedness and the digital divide - are worth considering, especially as macroeconomic policy and regulation fall behind the pace of FinTech innovation.

 The opportunities FinTech trends offer

  • Greater financial inclusion: The opportunities that come with each FinTech industry trend offer financial institutions the chance to improve and adapt to a changing economic environment. For example, as emerging markets grapple with ageing financial infrastructure and outdated business models, FinTech industry trends present ample opportunities to resolve these issues and ultimately increase financial and digital inclusion, meaning the chance for more outstanding market share for financial firms. 

  • Improved operational efficiency: Robust and flexible digital solutions powered by technologies like the cloud make addressing internal problems and process inefficiencies easier than ever before. As financial firms become more digitally savvy and continue to apply the power of technology to solve everyday issues, resource availability should improve, internal processes should become more streamlined, and competitive advantage should increase overall.


FinTech industry trends continuously change how the financial markets operate and serve customers, ultimately for the better. As the pace of FinTech innovation continues to speed up, financial firms and industry players need to prioritise adopting these trends to maintain relevance in a changing market. And the first step is to be aware of these top FinTech trends shaping future financial needs.

Embrace FinTech trends of the future with BSO 

Having a robust and reliable infrastructure in place to facilitate the adoption of these FinTech trends is also a key consideration to keep in mind. With a network and connectivity infrastructure partner like BSO, data-intensive financial firms can be confident in the capabilities of their infrastructure, knowing that their mission-critical operations can continue uninterrupted. Additionally, with high-performing infrastructure, firms can access dynamic new global markets more efficiently and harness new business-generating opportunities for future growth. 

Learn more about how our expert solutions power the financial markets, or contact our team to see how we can help your business take advantage of industry innovations.


Discover BSO’s expert industry solutions


The company was founded in 2004 and serves the world’s largest financial institutions. BSO is a global pioneering infrastructure and connectivity provider, helping over 600 data-intensive businesses across diverse markets, including financial services, technology, energy, e-commerce, media and others. BSO owns and provides mission-critical infrastructure, including network connectivity, cloud solutions, managed services and hosting, that are specific and dedicated to each customer served.

The company’s network comprises 240+ PoPs across 33 markets, 50+ cloud on-ramps, is integrated with all major public cloud providers and connects to 75+ on-net internet exchanges and 30+ stock exchanges. The team of experts works closely with customers in order to create solutions that meet the detailed and specific needs of their business, providing the latency, resilience and security they need regardless of location.

BSO is headquartered in Ireland, and has 11 offices across the globe, including London, New York, Paris, Dubai, Hong Kong and Singapore. Access our website and find out more information: www.bso.co