It’s been a month since we bid the year 2022 adieu. Still, no one can deny that the year presented many opportunities for financial service providers to innovate, broaden their service offerings, and engage consumers in new ways.

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Stepping into 2023 got us wondering; what trends can stakeholders expect this year across the entire financial technology spectrum — from technology to regulations, funding and operations in general? So we hosted a Twitter Space with some of our friends in the industry to find out.

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Here are the top key predictions and takeaways:

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1. Expect crime incidents, like fraud, to increase.

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“Anytime we are facing hard times, people tend to get desperate. Especially in the current economic downturn, we should expect crime incidents, like fraud, to increase. For example, we could see more traditional phishing and social engineering attacks that will attack giant corporations and their executives.

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One way to mitigate this is by increasing awareness campaigns, especially with individuals who are being introduced to digital payment channels. It is also vital for organisations to choose a provider that can give you all the support and security without impacting the customer experience and leading to customer drop-offs.”

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— Mohammed Maibe, Head of Growth at VerifyMe, on compliance and the potential increase of fraud in 2023.

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2. Compliance and regulation will be paramount in how fintechs build, scale, and get funding.

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“Investors 1000% consider the compliance framework of a fintech startup when making investment decisions. In 2023, compliance and regulation will be paramount in how fintechs build, scale, and get funding. On the investment side, we will see chief policy officers within venture firms working directly with governments to direct policy that is favourable, friendly and supportive of startup ecosystems.

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We will see a trend where government policies are drafted in collaboration with some of the leading founders in the country. Investors will always look at a startup’s compliance framework. I think it’s essential for startups to have roles like “Head of Policy”, someone in-house whose primary responsibility is working with the legal team, compliance team, and governments to ensure the company is in lockstep with all the regulatory bodies and government policies.”

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— Alisha Golden, Investment Associate at Techstars Toronto, on the correlation between compliance and investment.

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3. Only high-quality startups can expect funding.

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“From my conversation with VCs and other founders, it’s clear that what existed in the last 18 months or two years across the world, where VCs were loaded and ready to deploy, might be different now. I think startups will continue raising money, but there will be high-quality startups getting funded.

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In the past, the focus was on figuring out distribution and pushing for revenues at all costs. However, to founders, I say this — if you don’t need to raise money today, don’t raise money. If you are in a strong position where you are breaking even or can delay raising, you should delay it. But this is contextually based because it depends on where founders are in their startup journey.”

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— Miguel Sousa Dias, co-founder and CEO of Fluna on fundraising and investments in African fintechs.

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4. You can never go wrong as a founder when you stick to the fundamentals in 2023.

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“Regarding the market trends and things to expect, you can never go wrong as a founder when you stick to the fundamentals, i.e. the old-school way of building a hardcore business and growing revenue. Of course, there’s value in using investors’ money to grow businesses, but we believe that opportunity comes just once, and we should make the most of it the first time we get it. Kora is a company that sticks to the fundamentals. It’s why we’re small on the fundraising side of things. We’ve figured out how to build, scale, and manage the organisation with our revenue alone.

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Even though the financial market will always have ups and downs, we hope to be around for a long time and keep building products that benefit our businesses and their customers in the best way possible”

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— Dickson Nsofor, CEO of Kora, on Fintech investment trends in 2023.

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The session contained a variety of brilliant predictions about the African Fintech scene in 2023. If you want to listen to the entire thing, click here to head to our Twitter page, where the recording is still up.

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At Kora, our mission is to connect Africa to the world and connect the world to Africa via payments. For startups and businesses working in Africa, we provide All The Support You Need ™️ to start, scale and thrive on the continent. Visit www.korahq.com to see all the ways you can grow with Kora.

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