But fintech is resilient. Innovation continues to drive new developments in lending, payments, crypto and, in particular, infrastructure, showing that the industry still has lots of room for growth. And even though investment activity decreased this year, it still remains well above where it was in 2019 and 2020.
Infrastructure providers have a unique opportunity to be a bright spot amidst all the doom and gloom. Over the years, infrastructure has enabled fintech companies and non-financial services companies alike to seamlessly integrate financial products into their platforms.
However, as the market grew crowded, infrastructure providers have started competing over who can develop the least expensive product and sign the most fintech companies. The infrastructure market is overlooking a pivotal opportunity to build additional product capabilities that address pain points arising from the struggles of fintech.
Infrastructure providers can help connect fintech companies with incumbent banks so that they can both reap the benefits of the interest rate environment.
Infrastructure providers must reprioritize and find a way to grow their capabilities for their current customers instead of just signing new ones. To do this, they’ll have to take a closer look at the problems those customers deal with on a daily basis. What does a fintech company do when it’s under a fraud attack? What does a new compliance order in the U.K. mean for their business? How do they retain customers who are terrified by news of skyrocketing interest rates and inflation?