In spite of many challenges, the UK fintech market has continued its growth – providing businesses with ways to remain ahead of the curve and offer simpler, more accessible financial services, with the UK retaining its number one position as Europe’s top fintech market. 

Lynne Darcey-Quigley, CEO and Founder of Know-it, writes for Payment Expert on the six fintech trends that can help ensure the UK sector has a successful 2023. 

The rise of invoice financing

Invoice finance can help you bridge that gap by borrowing against the invoice value. A short-term loan against invoices is invoice financing, in which your business borrows money against amounts that are due on invoices you’ve issued to customers. Collateral is then provided in the form of these trade receivables. 

The construction, retail, transportation, and consumer goods industries regularly use invoice financing. Using invoice finance can be viewed as one of the many business financing options because you can receive cash immediately without waiting for your customers to pay you in full. As a result, working capital is maintained and problems with the credit and cash flow of the company are avoided. 

It can then serve as an alternative to financing slow-paying accounts receivable or to meet short-term liquidity needs. There will be a strong role for invoice financing in the fintech market of 2023 as cash flow continues to dictate the chances of success for many businesses.

The rise of cloud computing

Cloud technology has played a critical role in facilitating SMEs and large enterprises in recent years and will play a major role within fintech in 2023. With cloud computing, businesses can reimagine and pave the way for a technology-first and data-first work culture which cultivates business continuity and digital transformation. 

Applied agile technologies have been a key component of fintech services. Structures of banks are complex, with functional silos. By adopting agile technologies, modern banks, particularly neobanks, are simplifying their organisation’s processes and ensuring accountability in the face of global digitisation. 

As the fintech industry grows exponentially, cloud computing is driving that growth. Scalability and flexibility should be the core principles of UK SMEs as they seek steady expansion in 2023. 

Know-it is a cloud-based platform that can be accessed on a web browser from anywhere in the world, allowing businesses to always keep on top of their credit management to protect their business cash flow. 

Embedded Finance will create a seamless user experience

One fintech trend that is poised to boom in 2023 is embedded finance. For users, this technology simplifies and speeds up purchases and makes items more accessible. 

In addition to giving the providers a way to maintain strong relationships with the add-on providers, embedded finance provides a way to increase customer loyalty to the provider with all-in-one purchases.  

Embedded payments have made the payment process simpler for businesses and end-users, eliminating barriers and further meeting our desire for even more convenience given the society we live in. 

However, some embedded lending platforms have been unregulated for a considerable period of time and have only recently begun performing credit checks for users looking to use the facility which could spiral into a credit crunch.

How AI will become an indispensable tool 

For fintech companies, artificial intelligence (AI) has long been an indispensable tool. Automation of report writing, financial data management, and other operations is made faster and more accurate with robotic process automation (RPA). 

The reduction in employees is made possible by removing human intervention from routine tasks. As a result, financial institutions are implementing adaptive AI, which adapts to work in a specific field. By obtaining information about past human-machine interaction experiences, it self-adapts to the conditions exhibited. 

Gartner predicts that by 2026, companies that use adaptive AI will have a 25% advantage over competitors using conventional earlier AI models. RPA and AI are rapidly changing how businesses are working, having a huge impact on productivity and giving organisations deeper insight from vast amounts of data.  

PaaS to become even more critical

Retaining customers is something every business must focus on. To improve and maintain their retention rates, many companies have been turning to platform as a service (PaaS). 

As part of the PaaS model, clients can create new add-ons for the product they originally purchased. As a result, SaaS/PaaS providers will be able to offer clients a much more personalised experience which should encourage their growth rate and customer retention. Know-it is constantly evolving, thanks in part to our users’ feedback. 

Making Tax Digital (MTD)

Since MTD was announced in 2015 most businesses have responded well to these changes by implementing new tools and processes has been largely positive. Businesses have been able to adopt new tools and technologies and take a digital mindset when it comes to filing taxes.

The new MTD penalty points system will come into effect in January 2023 so expect this to be a hot talking point as we begin to see the businesses that have been slow to adopt these new technologies, regularly make mistakes and miss deadlines.

Fintechs are known for their disruptive innovations, and 2023 will be no exception. Others fully embrace it while some struggle against it. 

To mitigate against shocks and disruptions like the one that occurred in 2022, fintech companies should build their financial services more robustly. Despite that, there is no limit to the possibilities. 2023 will be full of innovation and growth.

This article was first published by paymentexpert.com