Recently, the fintech sector has experienced a substantial transformation, especially in the aftermath of the global pandemic. The early 2020s fintech boom may be familiar to you.
According to Cenk Kahraman, CEO of Finance Incorporated Limited, the era of rapidly increasing user adoption and seemingly endless growth is over.
He notes, “The easy growth days of digital payments are over. Card penetration has reached saturation, and the transition from cash to digital payments has slowed. This slowdown, paradoxically, is a positive indication. Businesses are being compelled by it to develop new methods of payment processing.”
Kahraman recalls that five years ago, “You could launch a digital wallet and watch the users pour in. Today? You have to present something really special. This slow approach to growth plateauing represents a significant turning point for the industry. We are no longer just processing financial transactions.”
These days, each payment is a data transaction full of opportunities and insights. Payment companies have been compelled by this change to look beyond their conventional roles and explore new growth opportunities. Value-added services are becoming a crucial tactic for fintech businesses looking to stand out in an increasingly competitive market.
“Businesses that can provide a range of services beyond simple payment processing will prosper,” claims Kahraman.
Advanced analytics, fraud detection, and individualised financial advice are a few examples of these services.
Trends shaping the fintech landscape
According to Kahraman, several trends are shaping the future of the fintech industry, with the importance of proprietary technology standing out.
He emphasised that owning one’s software is not just an advantage, but a necessity in the current fintech landscape.
This idea has been adopted by FIL since its founding, and the company has created its own technology stack to stay flexible and adaptable to market changes.
Kahraman believes the Buy Now, Pay Later (BNPL) industry is another area ripe for expansion and innovation.
“BNPL has witnessed a steady increase in interest rates, consistent with a fundamental change in how consumers view credit,” he added.
Kahraman noted that BNPL will be easily incorporated into routine business dealings in the future, possibly enabling consumers to use it at the point of sale with just a phone call or card tap. Another important trend is financial integration and open banking.
He believes open banking can build a more cohesive financial system.
“Imagine managing all your bank accounts from a single platform. That is the power of open banking,” Kahraman asserted.
However, he does recognise the difficulties in implementing such systems, especially given how they disrupt established banking models.
The speculative future of fintech
Kahraman presents the idea of “predictive finance” as an evolution of embedded finance as we move forward in time. He clarifies that predictive finance is more than just providing financial services when needed. It involves foreseeing those needs before the client even becomes aware of them.
In his vision of the future, Kahraman combines data analytics and artificial intelligence to provide proactive financial solutions. Imagine your financial platform remembering a significant event like your anniversary and recommending restaurants and gifts that fit the occasion, your budget, or your long-term objectives, or trading and optimising your investment portfolio on your behalf.
Although fintech already has examples of these innovations, the technology is not yet flawless. Despite the widespread belief that blockchain and other cutting-edge technologies will dominate the financial industry in the future, Kahraman takes a more measured perspective.
He admits, “Blockchain will definitely play a role in shaping the future of fintech.”
However, it is only a single component of a much bigger puzzle. The true transformation will occur in how we combine these technologies to produce smooth, user-focused financial experiences.
Navigating the evolving fintech maze
Businesses in the fintech sector face many obstacles as it develops, especially in the regulatory arena. Kahraman highlights the pronounced variations in regulatory frameworks across geographical areas.
He notes that while Europe is a leader in many respects, it is overly regulated compared to the United States and Asia-Pacific. Both innovation and operating costs may be hindered by this.
Kahraman sees opportunities for businesses that can successfully navigate this complicated terrain despite these obstacles. He suggests that being proactive rather than reactive is crucial.
“Assist regulators, plan for future developments, and incorporate adaptability into your systems,” the CEO added.
Kahraman also believes that industry consolidation will influence how fintech develops in the future.
“The next few years will see a lot of mergers and acquisitions,” he predicts.
Businesses that can strategically expand their capabilities through acquisitions or partnerships will have a strong chance of success.
FIL’s vision for the future
Kahraman is committed to establishing FIL as a model fintech leader as the company looks to the future.
“We don’t just want to succeed; we want to demonstrate that moral behaviour and success can coexist,” he said.
A combination of strategic acquisitions and organic growth is part of FIL’s approach.
“We are constantly searching for ways to increase our capabilities. However, our acquisitions are not solely for expansion. Our goal is to build a more global, accessible, effective, and moral financial ecosystem, and that is reflected in every action we take. This dedication to moral behaviour forms the foundation of FIL’s identity. As we expand, we have the chance—and the obligation—to influence the direction of finance. We want to demonstrate that it is feasible to prioritise sustainability, inclusivity, and social responsibility while still making a profit,” Kahraman stressed.
When we consider fintech’s future, it’s evident that the sector is about to undergo revolutionary change. With the emergence of predictive finance and the challenges of navigating intricate regulatory frameworks, businesses such as FIL are blazing a trail through uncharted territory.
According to Kahraman, the future of fintech will be characterised by responsible innovation.
He concludes by saying, “Technology isn’t the only factor influencing the future of finance. It’s about leveraging that technology to develop a more equitable financial system for all. That is the future that FIL is striving for.”
Businesses that can navigate regulatory challenges, balance innovation with ethical practices, and anticipate customer needs will be well-positioned to drive fintech’s next phase of growth. As the sector evolves from simple transactions to offering personalised, value-added services, companies like Finance Incorporated Limited, with their focus on strategic expansion, proprietary technology, and moral leadership, are poised to shape a more inclusive, innovative, and sustainable financial future.