Weekly Research Highlights – 21 March 2023

The fintech industry is rapidly evolving and disrupting traditional financial systems. In this article, we bring you the latest research insights to help you stay ahead of the curve and understand the future of financial technology. Enjoy researching!

The Role of Embedded Finance in Boosting Conversion Rates (Decta)
Embedded finance is an emerging software distribution model that integrates financial services into existing product ecosystems through partnerships with financial infrastructure providers. The importance and potential of embedded finance cannot be overstated. The management consultant expects the overall market to return to single-digit figure growth, and generate global payments revenue of roughly $2.5 trillion by 2025.[1] And an intelligence report from Business Insider suggests that embedded finance companies will reach a market cap of $7.2 trillion globally by 2030. Retail and ecommerce platforms currently offer the majority of use cases for embedded finance solutions. The range of buy now, pay later options at online checkouts are one excellent example of the technology being implemented in the retail environment. Additionally, embedded finance is expected to more extensively expand to insurance, tax, accounting, banking and other services in the foreseeable future. New use cases are already emerging in the fintech and neobanking space, with Galileo, Treasury Prime, Stripe, and Marqeta all being early examples of this technology. The potential for embedded finance is massive, considering that, in 2021, US consumers and businesses spent $7.16 trillion on debit and credit cards collectively. Read more

New Report Details Virtual Assets Regulation Across the Globe (The Fintech Times)
UAE-based law firm specialising in blockchain, cryptocurrency, web3 and fintech, KARM Legal Consultants, has published a report analysing the regulatory landscape for virtual assets in various jurisdictions. As both the adoption and potential use cases of blockchain technology continue to grow, so have calls for greater regulation in that space. The last few years have seen various positive regulatory developments in the virtual assets sector, as different jurisdictions across the globe begin to recognise the potential of virtual assets services. The report, ‘Virtual Assets Regulatory Framework: An Evolving Landscape‘, aims to identify key regulatory developments in regard to virtual assets across the UAE, Bahrain, Switzerland, Liechtenstein, UK, and USA. Read more

Nearly Half of Singapore Businesses Call for Improved Fintech Solutions to Offset Current Economic Headwinds, Shows Rapyd Report (Business Wire)
41% of global organizations believe that international business expansion is imperative to ease their current trading concerns. In Singapore, 48% believe better fintech solutions and faster settlements/payments can help solve these issues and are needed to grow their businesses. That’s according to a new study released by global fintech-as-a-service partner Rapyd, which shows that a sizeable contingent of cross-border businesses are looking to double down on their growth ambitions as the best remedy for the economic headwinds facing them, despite mixed levels of business optimism. Rapyd’s 2023 State of B2B Cross-Border Payments report shows that businesses are divided on how they view the year ahead. 43% expressed concern about the current state of business versus 57% that claimed not to be concerned. Half of global businesses cited inflation as their biggest worry, followed by increasing interest rates (46%) and market volatility (35%). Cross-border trading issues such as currency fluctuations (32%) and import/export challenges (30%) are also featured prominently in the list of key business concerns, with 35% of businesses calling for better fintech solutions to improve the transparency, speed and cost of payments. In Singapore, the top two concerns cited are increase in interest rates (53%) and reduction in incoming work/business (43%). Read more

2022 Sees 20% Drop in Stock Market Capitalisation: WFE Report (The Fintech Times)
Global stock markets faced a challenging year in 2022, with the World Federation of Exchanges (WFE) reporting that $25trillion was wiped off markets worldwide. The WFE’s FY 2022 Market Highlights report revealed that stock markets experienced a 20 per cent decline in market capitalisation and a 10 per cent decline in value traded, interrupting the positive trend of the previous two years. The report highlights factors such as inflation, the Ukraine war, and China’s Covid lockdown as key contributors to the slump. Inflationary trends caused by strong consumer demand and supply bottlenecks, exacerbated by the Ukraine war and sanctions against Russia, increased energy prices, especially for European countries. Additionally, China’s stringent Covid lockdown strained the global supply chain, driving up prices of imported goods. As a result of the high inflation environment, investment cooled down in the equity market, alongside the tightening of monetary policies that included raising interest rates across most economies. Read more

How to influence fintech buyers – CCGroup research findings (Tech EU)
According to a new report “How to influence fintech buyers” published by PR & marketing consultancy CCGroup, 70% of European financial institutions expect to increase investment in financial technology over the next 18 months, despite the challenging macroeconomic environment and wider economic downturn. For providers who are looking to sell to banks and fintechs, on one side, this is good news, with market changes driving increased demand and investment, but on contrary it might be bad news because buyers are becoming more discerning in what they are looking for from providers. The average ticket price for upcoming tech stack investments marked a 300%+ increase compared to 2020 data (valued at €290,000 – €570,000). So, the buyers want solutions that will boost revenue and profitability (34%), allow them to more easily integrate third-party services (33%), and, conversely, allow third-party services to be more easily integrated into their propositions (31%). Read more

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