Michael Zetser Highlights the Most Critical Fintech Trends from 2023 to 2025


Michael Zetser entrepreneur, the fintech expert, states that by 2025, the value of the global fintech industry would reach $305 billion. There are a ton of fintech solutions and products that have already become a part of our daily lives. As far as consumers are concerned, they have seen a dramatic change in the processes used to pay for goods, logging into bank accounts and obtaining loans. Financial institutions have also had to adapt in order to serve their existing clients, attract new ones and prevent fraud.

With the world turning to digital-only solutions at a fast pace, it is a must to learn trends that are likely to shape the future. The same holds true for the fintech industry and Michael Zetser has highlighted some of the most critical trends for the sector from 2023 to 2025.

Artificial Intelligence

You cannot talk about technology without talking about artificial intelligence (AI), as 2023 has become the year of the AI and being a fintech icon, Michael Zetser highlights the role it will play in the sector. The World Bank revealed that almost 1.2 billion unbanked people have now gained access to financial services, thanks to fintech, but there are still 3.5 billion people without access to a bank.

Bad actors in the informal financial sector, such as loan sharks and expensive moneylenders can exploit these people. This is where AI can come in handy because this discrepancy can be reduced with its help. Machine learning algorithms and artificial intelligence (AI) will have an unbiased opinion on who can have access to lending and banking services.

Peer-to-peer (P2P) lending

One of the most popular forms of lending is P2P because it directly connects borrowers and lenders, thereby eliminating the need for intermediaries, such as banks. Not only does it reduce costs, but also provides more profitable and accessible loan options. Since it can cater to business and consumer markets, this particular fintech trend is expected to boom in the next couple of years. It may have started out as a niche, but P2P lending is gradually becoming one of the top forms of financing. As a matter of fact, it is expected to record a growth of 6.3% between 2022 and 2028.

Embedded finance

The massive ecosystem of integrated finance is already a force to be reckoned with and Michael Zetser says that it will continue to expand. In fact, research has shown that it is likely to record a 40.4% expansion. Companies in the fintech industry can use integrated finance to offer comprehensive services to customers, thereby boosting their experience and their own revenue.

These services include insurance, credit, banking, payment processing, investing and loans. One of the fields that has already seen rapid growth is Buy Now Pay Later (BNPL). As obvious, it allows customers to make purchases right away and pay for them later.

Regulatory Technology (RegTech)

By 2030, the RegTech industry is expected to reach a valuation of a whopping $44 billion. But, what exactly is it? One of the most highly regulated industries in the world is none other than the financial industry and RegTech is expected to transform the regulatory landscape of the industry with innovative and cutting-edge solutions for addressing compliance issues.

To put it simply, RegTech refers to technology developed for monitoring regulatory procedures and is essentially a subset of the overall fintech industry. Companies operating in this sector focus on compliance, reporting and tracking. While the word was first coined back in 2008, RegTech has undergone significant growth and is expected to continue due to the involvement of AI, blockchain and alternative finance.

Companies have been able to automate most steps of the compliance process thanks to RegTech and Michael Zetser believes that more advanced solutions will be developed. These would assist financial institutions in identifying and mitigating risks in the next few years. To accomplish this, fintech technologies like big data analytics, machine learning and cloud computing are likely to be used.

Blockchain and DeFi

The most important thing to understand about decentralized finance (DeFi) is that it enables free and quick P2P transactions. Recent research shows that a greater number of people have become to see the advantages of using digital currencies for making cross-border payments. The fintech market has already seen DeFi dominate and it is expected to continue in 2023 and beyond.

Similarly, international money transfers have also been revolutionized via blockchain technology because it is more accessible and significantly faster, not to mention cheaper. The global economy is expected to grow to a massive $1.76 trillion in the next decade, thanks to blockchain technology. The banking sector has already claimed a 29.6% blockchain market share. According to a PwC report, all major economies will see widespread use of this technology by 2025.

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