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The FinTech Landscape

What do we learn from the FinTech State of the Union Research?

The third annual Fintech State of the Union study traces global perspectives from consumers, fintech providers and venture capitalists. Commissioned by Discover Global Network and 451 Research of S&P Global Market Intelligence, a study conducted a survey of global fintech companies to identify emerging trends in digital payments that are shaping the fintech ecosystem.

Trust in payment networks is very important for fintech companies

According to the study, the fintech companies are dependent on payment networks, and 93% of those surveyed say that the current economic environment has increased their businesses’ dependence on payment networks. Fintech companies are looking for flexible (44%) and innovative (44%) payment partners. Fintech companies also highlight their main benefits from from payment networks through financial investment (42%), customer access (38%), and technology adoption (38%). Fintech companies are bracing for growth compared to previous years, with 34% of respondents expecting “significant growth” and another 43% expecting “moderate growth” in 2023. In addition, 55% of venture capitalists say the growth outlook for the tech sector over the next five years is very strong, and 47% say the same about fintech. As the industry continues to innovate, fintech companies are considering the impact of new technologies on their business, with 91% of respondents considering real-time payments relevant, and 85% considering open banking relevant.

Fintechs focus on a number of different payment technologies

In terms of payment use cases, the study found that fintech continues to find relevance in a variety of technologies that extend to both consumer and B2B audiences. Payment data security (90%), payment acceptance (89%), and contactless payments (85%) are incredibly important, and most respondents consider these payment use cases to be important to their business. In addition, fintech companies are finding B2B use cases for automation (87%), digital or virtual cards (86%) and payroll (84%) relevant to their business.

One of the most important open banking innovations of the year

Mastercard recently announced its latest innovation in open banking in Europe, Account Holder Verification, a new solution that provides a seamless experience aimed at instantly verifying who they are. To further spur Mastercard’s ambition to deliver smart open banking services, it is entering a new partnership with French open banking lending solutions specialist Algoan, which builds on Mastercard’s strengths in providing smarter lending solutions through open banking in the US. and accelerates inclusion through advances in credit decisions.

These innovations support Mastercard’s drive to embrace new networks and expand its open banking capabilities that allow people to securely share their financial data to access innovative payment solutions, expanding choice, enabling secure and seamless lending, and bringing the hopes of the digital economy to more people. In an increasingly digital world, bank account verification is more important than ever before. The launch of the Mastercard account holder verification service automates, strengthens and simplifies the way businesses across markets and industries can complete the verification procedures.

Mastercard envisions this solution will have a wide impact across industries, helping to address account opening pain points, adding payment credentials and direct debit for players such as digital wallet providers, PSPs, asset management apps, real estate technology platforms, insurance companies, e-commerce players and many more. The solution provides instant verification of bank account ownership based on Mastercard’s open European banking connection.

The verification process also provides businesses with a match score, which indicates the degree of match between the name submitted for verification and the name stored in the file of the end user’s financial institution.

In addition to this innovative new product, Mastercard has initiated a new partnership with Algoan, an open bank loan specialist in France, to help accelerate access to financial services in new European markets, starting with the Western European region. As part of the partnership, they will use the Mastercard Open Banking connection to enhance their Credit Insights, Credit Score and Payment Score products and categorization functionality.