Top 10 Fintech Predictions for 2022

The Future of Fintech

6 years is an eternity in Fintech and this is my 6th annual Top 10 Fintech Predictions for 2022.

2021 was a great year for Fintech, billion-dollar IPOs, Crypto, NFTs, and the evolution of blockchain technology has taken over the globe. BigTech are all basically Fintechs now and I think we are just at the beginning of the “Big Melt”.

2021 was another year that all of us finally learned how to live with COVID, Delta, and the latest Omicron variant. Our new president settled in with his new administration signing a new wave of tighter finance and banking regulations. 

The shining moment for Fintech truly came through in the past 48 months. The acceleration of digital experience from payments to insurance, to the deliverance of the Paycheck Protection Program leveraging the backbones of Fintech, we can confidently say that we’ve made the right Fintech infrastructure investments.

Before we get on with our 2022 predictions, let’s go for a round of “stump the chump” and see how my 2021 predictions worked out. If you want to do a side-by-side, click here for my 2021 piece.

#10 – Mega-Mergers (TRUE) – Boy oh boy have we seen some spectacular IPOs and mergers in the Fintech space in 2021. It’s just getting started. There are still a ton of privately held Fintechs that I am expecting to see IPO at some point in the future. Goldman Sachs (NYSE:GS) buying Greensky ($2.23B), PayPal (NASDAQ:PYPL) expanding globally buying up Japan’s BNPL Paidy for ($2.73B) just to name a few.

#9 – Centralized Digital Currency (TRUE) – China, El Salvador, and Jamaica are all going to digital currency. We are so early with this stuff that other major powers like the US, UK, and Russian are all on the verge of testing their national Digital currency. 

#8 – Disintermediation (KINDA) – Last year, I said that we need to get away from these overbearing government regulations (licensing, money transmission) to truly evolve Fintech to its final form. Well, our government didn’t budge, but the crypto space evolved by leaps and bounds, bypassing all forms of government regulations and even ventured largely into DeFi, decentralized financing. We can finally lend money without licensing and oversight.. yay!!!… right? 

#7 – Massive Connectivity(KINDA) There is no doubt that data from everyone and everywhere are connected, collected and analyzed. However, we haven’t seen the data singularity that I was hoping for. I really need my car to tell me how many eggs I have in the fridge and show me the nearest store and somehow fit a grocery store run into my google calendar after work… 

#6 – Data Ownership (KINDA) – For a second there, I thought we will have some clarity on who owns our data. This was hotly debated before COVID, however, along came COVID and in an interesting twist of fate put a stop to all of this. Data privacy and our medical data control is thrown out the door. Our government, employers, heck even JetBlue need to know what flows through my veins. Who’s talking about banking data anymore?

#5 – 5G and LiDAR (MEH) – 5G and LiDAR came and went. If Tesla can’t figure out level 5 autonomy, no one will. Level 4 is pushed back by a few more years. I was really hoping that I can nap during my commute or at least write more blogs.

#4 – BaaS and LaaS – (TRUE)– Oh my word this space exploded. When there’s gold to dig, those that sell pickets and shovels always win. There are a ton of Banking as a Service, Card as a Service, Lending as a Service tools out there. Good or bad, a bunch of us out there are making Tech in Fintech a complete commodity play.

#3 – Collision with China – (TRUE) – We will fight a war with China. Of course, these wars are based on Economics, Cyber Warfare, and Space Exploration. I hope we don’t have to shoot bullets and let off bombs anymore as civilized as we’ve become. We’ve been butting heads with China all throughout 2021, from the COVID Virus blame game to Taiwan to the global supply chain to trade manipulation. I think I am going to leave this topic out of all of my future predictions. Battling against China is just a fact of life at this point. 

#2 – Delivering Energy (KINDA) – We voted and now $1.3 trillion is earmarked to be spent on our energy sector. Need I say more? In 2021, I predicted that we must invest in our energy sector from energy generation to infrastructure to survive and compete. Let’s not forget what happened in Texas last year, millions of people were out of power for weeks and a few of us perished because of our poor energy infrastructure. How much of the $1.3 trillion dollars will impact our lives, is yet to be seen. Fintech runs on basic infrastructure, let’s hope that this money is well spent.

#1 – End of Retail Banking (KINDA) – Retail banking is still around, but here is a list of retail stores closed in 2021… American Eagle (80% of their physical locations), Banana Republic and Gap (closing all stores by 2023), Bed Bath & Beyond (closing 200 stores), CVS (closing 300 stores), JC Penny (closing 170 stores), Macy’s (closing 10 stores just in January 2022), even Starbucks is closing 400 locations. These products and services aren’t going away, they are just being decentralized and delivered digitally. I bet that there’s a start-up out there inventing some sort of delivery box for your front door that will alert you when stuff comes to your house. 

4 Trues, 5 Kindas, and 1 Meh… I am getting pretty good at this.

Now, let’s see what I’ve dreamed up for ya’ll in 2022.

My top 10 Fintech Predictions of 2022 are…

#10 – The Great Transfer of Wealth – Who is making a ton of money at NFTs, Crypto, and Blockchain? Young people. Who’s losing it all? The rest of us. As with all new technology, younger folks figure it out first and the rest of us get to pay the toll fees and enjoy it all. What I like about young people is that they are full of ambition, talent and always pushing the boundaries. This time, it’s different. There’s money involved, Web3, Blockchain will steal us blind before we realize it. Keep your eye out for the next Bezos, Musk in 2022. The emergences of the “Web3 Billionaire Club” will be here sooner than you realize.

Who is making a ton of money at #NFTs, #Crypto, and #Blockchain? Young people. Who’s losing it all? The rest of us Click to Tweet

#9 –  Crypto Civil War – There will be winners and losers, the dominance of major coins such as Bitcoin and protocols such as Ethereum will fade as quickly as they came. There will be other stores of value such as NFTs and spaces within the Metaverse that will quickly overtake anything that’s on the market. There will be a war between centralization and decentralization. It will be won by those that control the basic infrastructures such as satellites and electrical grids. Don’t count out big tech, they know a good thing when they see it and it’s already happening.

#8 – Money Laundering Nirvana – There is no chance any government in the world can control the flow of money now. When transactions are being cleared on a ledger so opaque (for a good reason), we can forget about Anti Money Laundering (AML) measures, OFAC, and the Office of Foreign Assets Control list. Tax evaders, terrorists, criminals, and who knows what other unsavory characters out there are laughing all the way to their wallets. There has never been a system, so prolific and instantaneous than cryptocurrencies running on decentralized ledgers to transfer money and consummate contracts. We will see more artful ways to evade detection, taxation, and regulation. It’s the old art market all over again. 😉

#7 – Inequalities in the Metaverse – We all live in the ghetto now… oh you didn’t know? The rich and the powerful have already bought up all of the main thoroughfares in the Metaverse or Omniverse. These are digital real estate (like domain names of the 90s and 00s) created by the Big Tech to combine virtual reality, augmented reality into our lives. Your life will be so boring without a goggle strapped to your head. You better fork out some of that sweet sweet Bitcoin to gain access to the places you want to call home, otherwise skid row you go. All joking aside, trust me, there won’t be any equality in the meta-verse

#6 – Fade of Higher Education – 1973’s animated science fiction film Fantastic Island, which was based on a French novel “Oms en série” from 1957, talked about children learning the entire knowledge with a glowing ring of sorts around their neck once they are born. Now, we might not get there just yet, but boy can I tell you the amount of knowledge on Youtube, TikTok, and such that our children are learning at a pace never seen before. Having a teacher or a professor (no offense) with limited experience and worldview teaching our next generation of space explorers seems to be nonsensical. The end of higher education or paced education, as I call it is over. We will see a real change in how people learn in 2022. Why is this important in Fintech? You don’t need a college degree to play in the crypto, Web3 or MetaVerse, because they are not taught in our higher education systems. 

We will see a real change in how people learn in 2022. Why is this important in #Fintech? You don’t need a college degree to play in the #crypto, #Web3 or #MetaVerse, because they are not taught in our higher education systems Click to Tweet

#5 – The Death of Old World Rails – I am more confident than ever that ACH, Wire, VISA, MasterCard… all of these old-world rails will die shortly if they don’t reinvent themselves quickly. The old rails are making the individual consumers pay as well as the merchants that use them. The new rails are no different, however, they are more ubiquitous and interoperable. Two wallets from both ends of the solar system can exchange money without passing through proprietary hardware. All we need is a protocol. We’ve come a long way, from trading beautiful seashells in the iron age to the beautiful digital art of today. Visa processed 5 trillion dollars in the US and Etherum is already processing about 1 trillion dollars worth of volume. But it took Visa 63 years to get here!

Visa processed 5 trillion dollars in the US and #Etherum is already processing about 1 trillion dollars worth of volume. But it took Visa 63 years to get here Click to Tweet

#4 – $2 Billion Crypto Punks – Value, trust, authenticity, ownership, and ego are all on full display with NFTs, Crypto Art at Larva Labs. If you don’t have a crypto punk by now, don’t bother, the last one was sold for $3.74M … a scruffy-looking fella with purple sunglasses. The sense of ownership, display, or wealth (flex) is off the scales. I can’t describe it except for the fact that one can own one of these avatars and have it uniquely validated on the blockchain. I heard that Eminem just bought his Bored Ape NFT for $450k… apparently, the bored ape looked like him. You can see more of it at boredapeyachtclub.com. We have to ask ourselves, how did digital art get to this level of inflated valuation? Do we have that many NFT aficionados out there appreciating the same ape to give it a multimillion-dollar valuation? Either way, 2022 will be full of methods to display art whether it is in the physical or metaspace.

#3 – DeFi – True Peer2Peer Lending – Last time we tried P2P lending, it was a massive failure. LendingClub tried it and they gave up. There’s an imbalance of demand and supply plus massive credit losses. However, with DeFi, we have a flavoring of asset-backed financing. The asset is your token, the net worth of your wallet. As a minimum, the lender can recover some parts of the principle lent out based on their claim to the borrower’s tokens. However, concepts such as interest rates don’t exist in the crypto space, it’s all driven by demand and the platforms get to set their fees. None of the alphabet soup government agencies have a clue as to how to regulate lending with non-FIAT monopoly money. It’s truly revolutionary. My prediction is that all lending will be performed on the blockchain and it will be impossible to impose regulations such as interest rates, fees, and collections practices.

None of the alphabet soup government agencies have a clue as to how to regulate lending with non-FIAT monopoly money. It’s truly revolutionary #Crypto #DeFi Click to Tweet

#2 – BNPL is here to stay – BNPL [buy now pay later] will take over the world. Threatening all aspects of traditional lending. BNPL bypasses State and Federal regulation by offering a 0% interest rate and calling it a contract instead of a loan. The merchant buries some of the costs associated with the goods and services provided to the consumers. In other words, there’s enough infrastructure out there to mimic what VISA and Mastercards are doing without the high overhead cost of VISA and Mastercard. BNPL will be so pervasive that anything of value will be paid in an installment fashion. Energy, Education, Medical, and any other goods and services will be paid in installments.

#BNPL will take over the world. Threatening all aspects of traditional lending Click to Tweet

#1 – Inflation is our new friend – Like it or not, inflation is here to stay. When we printed out as much money as we did, the government will have to tax it back with inflation. It’s just a circle of fees. What does it mean for Fintech? We have to lend twice as hard because our money is worth half of what it was. 

Well, here’s to another great year for Fintech. As always, there will be momentous changes in our industry. But one thing is for sure, we will do what we do faster, cheaper, and more ubiquitous.


Timothy Li Headshowt 2020Timothy Li is a Senior Contributor for Crowdfund Insider. Li is the Founder of Kuber, MaxDecisions, and Alchemy. Li has over 15 years of Fintech industry experience. He’s passionate about changing the finance and banking landscape. Kuber launched Fluid, a credit-building product designed for college students to borrow up to $500 interest-free. Kuber’s 2nd product Mobilend is a true debt consolidation product, aiming to lower debt for all Americans. MaxDecisions provides financial institutions with the latest A.I. and Machine Learning algorithms and Alchemy is a state of the art end-to-end white-labeled lending platform powering some of the best Fintech companies in the world. Li also teaches at the University of Southern California School of Engineering.

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