• Daniel Kjellén, co-founder and CEO at Tink


• 13.12.2022 11:30 am
#payments #lending

1. Payments

“2023 will be a year when we see accelerated change in the payments market. Over the last year, Tink has paved the way for the widespread adoption of Pay by Bank, with use cases for account top-ups and bill payments in particular taking flight. This is being used by businesses wanting a low-cost, instant-settlement payment method that reduces friction and fraud, and by consumers who want a seamless user experience they can trust.

“Our payment volumes at Tink have doubled during the last year. This is a trend that is set to explode in 2023, as we work with some of the biggest payment service providers (PSPs) and fintechs in the world, such as Adyen and Revolut, to take Pay by Bank mainstream. And we have Variable Recurring Payments (VRPs) coming around the corner to bolster adoption further. I predict by the end of 2023 the majority of adults in Europe will have come across an open banking-powered payment.

“As a backdrop to this, consumer expectations for ‘one-click’ payments will only become more fierce, and as a result, we will see more consolidation in the market when it comes to the number of options available at the point of payment. Businesses have recognised that payments can become a competitive advantage for them, and that consumers will gravitate to a brand they already know and trust. This means the opportunity for big brands to whitelabel their own preferred Pay by Bank payment method, either through partnerships or acquisitions, will be a clear trend for 2023.”

2. Lending

“Amidst the current backdrop of skyrocketing interest and mortgage rates, and an ongoing cost-of-living crisis, the need for better risk decisioning and consumer access to financial services has never been greater. 2023 will be the year when large financial institutions ditch outdated credit checks and really start to use open banking for credit scoring to create fairer, more accurate affordability decisions – moving it mass-market.

“With the economic crisis showing no sign of slowing, the robust lending decisions that open banking facilitates are desperately needed. This will be vital to ensuring financial institutions make better risk decisions to reduce the number of loans that default, protecting potentially at risk or vulnerable consumers from problem debt. While also promoting financial inclusion by ensuring lenders are not needlessly turning down credit-worthy applicants that fall foul of more traditional credit checks, as now more than ever, people need access to safe, affordable borrowing options.”

3. Sustainability

“As the climate change conversation grows more serious, understanding the part fintech plays will remain front and centre over the next year. Encouragingly, we’ve seen innovative open banking use cases really come to life, such as carbon tracking to help businesses and their customers become more sustainable – a service that is increasingly becoming a benchmark for consumer preference when choosing who to bank with, particularly amongst the younger generation.

“For example, our consumer research shows that almost two thirds (62%) of 18-34 year olds want more information about their carbon footprint, and nearly half (43%) would switch to a new financial provider who allowed them to see the environmental impact of their purchases.

“It’s clear that banks that fail to give full, transparent visibility over environmental impact and carbon footprint may be at risk of alienating this key segment of consumers. That’s why we expect to see more cross-industry collaboration and powerful partnerships forming between banks and fintechs in 2023 – all with the aim of driving sustainable innovation through new products and services.”

4. Mass market adoption of open banking services

“With visibility across 18 European markets, we are able to see that mass adoption of the services open banking enables is on the horizon in 2023 – as recognition of the transformational benefits of data-driven services keeps pace. From fairer affordability solutions, low-cost, hassle-free payments, to carbon tracking – tapping into open banking is becoming a prime focus for the biggest businesses across the globe, in financial services and beyond.

“This will only continue to encourage a healthy and competitive industry and a vibrant ‘open’ financial ecosystem. In 2023, we will continue our work of building the most robust and trusted open banking platform in the world, to continue to power the pioneers and create services that give consumers and businesses greater choice and control.”