2023 Trends in CX, Fintech & AI: Go bold or get left behind

2023 trends in CX, fintech, and AI 2022 started off like a typical rom-com; after a couple of life-changing adventures, we thought we were finally headed toward our happily-ever-after. But wait—as we begin the first chapter of 2023, there’s a looming plot twist. What customer experience (CX) challenges can we expect to see in 2023?

Spotting emerging trends and helping clients take advantage of them is a critical part of our work at Beyond the Arc. Every year we focus on key themes and potential CX impacts that create opportunities and risks in the next 12-18 months.

Looking at the intersection of 2023 trends in CX, and 2023 fintech trends, our team shared predictions and insights. We want to help organizations “skate to where the puck will be”, and also forge a path that helps them skate ahead of the rest of the pack.

With ongoing economic uncertainty, differentiation and delivering measurable value are more important than ever.

2023 Trends in CX, Fintech and AI

CX and Financial Wellness >

Real-time payments will become a lever for improving financial wellness
Focus on financial health will drive new business models

Payments >

Credit unions will use FedNow to attract younger members
Embedded payments will drive growth in business super-apps

AI and Machine Learning >

AI/ML will become critical for using first-party data in a cookieless world
AI and NLP will gain traction for backoffice automation
AI image processing will continue to transform applications and CX

Social Media >

Machine learning will increasingly influence experiences in social media

CX and FINANCIAL WELLNESS

prediction: Real-time payments will become a lever for improving financial wellness

financial wellness is one of the 2023 trends in CX As 2023 promises more volatility in the economy and job market, financial institutions (FIs) will face more pressure to support financial wellness. Beyond the Arc CEO Steven Ramirez underscores the importance, predicting that focusing on financial health will be one of the top 2023 fintech trends. He argues the #1 challenge banks and credit unions will face:

“Rising interest rates, and the subsequent fallout, are going to batter consumers. FIs will need to do more to help protect their customers’ financial health. Despite much conversation and virtue signaling, FIs have not developed effective means to improve financial wellness.“

Gavin James, a CX strategist and our Director of Creative Services, expects that offering real-time payments will become a competitive driver to help meet that need:

“In a tough economy, both consumers and businesses grow edgy about cashflow. Real-time payments offer new control to pay bills at the last minute, and enable struggling businesses to get paid faster. Integrating services like RTP^® and FedNow^SM will quickly become essential to any FI’s CX strategy.“

prediction: Focus on financial health will drive new business models

Supporting financial wellness will become more of a focal point for new products and services and one of the key 2023 fintech trends. Nina Katz, a wealth management and banking expert, predicts we’ll see financial institutions come to market with new as-a-service offerings for financial health:

“As an example, a new financial education subscription-based service provides guidance around key life events, such as marriage, children, divorce, and retirement. Financial advisors can subscribe and offer this resource as a value-add to clients.“

the bold move for wealth management firms

Consider a business model mashup for mass affluent clients to help them prepare for homeownership. For instance, create a monthly ‘subscription box’ experience¹ of digital services that includes a robo-advisor app for financial planning and advice. It could help increase client engagement, and provide both a new revenue stream and an ongoing source of valuable client data.

PAYMENTS

prediction: Credit unions will use FedNow to attract younger members

Many credit unions (CUs) face the challenge of an aging member base and difficulty attracting younger generations. Designer Michelle Espinoza predicts the new FedNow service for real-time payments, launching in 2023, represents a pivotal growth opportunity:

“Credit unions have appealing qualities for Gen-Z (membership-owned, focus on community, lower fees), and offering instant payments could be the key to winning them over. But CUs will need to get better at marketing to this audience. Those that prepare now will have a competitive edge when FedNow launches.“

the bold move for credit unions

Download the FedNow Readiness Roadmap and complete STEP 1: Evaluate your own systems, processes and plans.

prediction: Embedded payments will drive growth in business super-apps

Major fintechs are dominating market share with small businesses by enabling embedded payments. Big banks like Chase are fighting back, creating digital ecosystems to “regain ground lost to Stripe and other big fintechs by integrating banking, payments and business services.”²

Gavin thinks one of the top 2023 fintech trends we’ll see is increased pressure (and innovation) to design B2B super-apps. This will give small businesses a centralized way to efficiently manage diverse financial needs. But making it work requires a user-centric focus:

“A super-app for small to medium businesses could become a vital differentiator for banks and credit unions. But it can’t just be a jumble of products and services, like the typical business portal. A winning super-app must put the user at the center, with a personalized, goal-oriented experience that reflects how business owners think and operate.“

AI and MACHINE LEARNING

prediction: AI/ML will become critical for using first-party data in a cookieless world

In mid-2024, the world will never be the same. No, this isn’t an apocalyptic prediction, just the long-awaited retirement of the third-party cookie. And with this change, much of the targeted digital marketing goes away. First-party data, or the internal data a company has about customer behavior and transactions, will be more important than ever.

As Steven sees it:

“In 2023, look for two data science techniques to gain popularity, look-alike modeling and cohort studies:

‘Look-alike modeling is a process that identifies people who look and act just like your target audiences.’³
‘A cohort is a group of users experiencing a common event within the same time period. And a cohort analysis is when you try to derive insights from the behaviour of this group.’⁴

“With these techniques, and a solid AI development process, banks and credit unions will be able to counter some of the performance marketing tactics that have led to fintechs’ rapid growth.”

the bold move for marketing leaders

In 2023, develop your first models to predict which factors determine customer lifetime value.

prediction: AI and NLP will gain traction for backoffice automation

For industries like banking and insurance, two ongoing challenges are how to operate more efficiently and personalize customer experiences. Jacqueline Espinoza, a CX strategist who frequently works on natural language processing (NLP) projects, predicts we’ll see a rise in NLP for workflow automation:

“Backoffice tasks such as document processing, underwriting scores, and uncovering customer insights for personalization can be automated with NLP. It’s ideally suited to automate repetitive tasks like sifting through volumes of documents, reducing costs by eliminating manual work and increasing efficiency. Combining NLP and text mining, organizations can uncover actionable insights faster, and in ways they never could before.“

Brian Yang, an analyst, expects we’ll see more wide-spread adoption of NLP as one of the 2023 trends in CX. In addition to using NLP to understand customer email:

“New NLP tools are emerging that will have a broad range of applications. For example, it’s becoming easier to automate the process of extracting factual information from documents or email based on a given prompt, or to automatically summarize long segments of text. It’s really about raising awareness for the many diverse use cases of NLP, so companies can benefit from it.“

prediction: AI image processing will continue to transform applications and CX

AI image detection and deciphering isn’t new, but it’s now gaining traction for more use cases. We see this driving new opportunities in the year ahead. Bruce Johnson, our lead data scientist and AI/ML expert, expects that places and objects that once required an explanation will be trusted instantly thanks to AI image processing:

“Images can include products and objects, but also problems. We already see apps that can diagnose problems with plants and suggest solutions. AI image processing will increasingly learn to capture the relevant details from visuals to solve issues and answer requests. This kind of thinking will span further business and sales applications.”

SOCIAL MEDIA

prediction: Machine learning will increasingly influence experiences in social media

As top social networks continue to battle it out for engagement, we’ll see more analytic innovations to improve monetization. Brian predicts that as machine learning gets ‘smarter’ for social media, brands will want to learn from it as well:

“ML helps identify the content that users would be most interested in. My friends who use TikTok say their ML algorithm is amazingly accurate and is almost always showing content they like. And because they’re seeing content they enjoy, it quickly becomes a time sink. Brands can find inspiration from top influencers who are widely recognized to create similar content for target groups that are more likely to be interested in their products.“

the bold move for customer service leaders

Evaluate if social media channels like Facebook and Twitter are still relevant for handling customer support. Time to consider Instagram and TikTok?

What kind of predictions would these be if we didn’t mention the metaverse? One of the 2023 trends in CX to watch is that metaverse experiences will become more targeted. Bruce notes:

“Machine learning will play a role in what offerings people receive in Zuckerberg’s metaverse. The metaverse will succeed by becoming more like Dungeons and Dragons, and less like the surveillance state. TikTok will introduce a competing metaverse that steals the show. Their hook will leverage the video preferences algorithm to capture psychological traits that advertisers want to leverage.“

How did our 2022 predictions turn out?

Did we hit the mark? Let’s circle back to a few trends we targeted for 2022:

The rise of financial super-apps. Big banks are gaining traction against fintech super-app leaders like PayPal by integrating banking, payments and business services. Admittedly, the progress in 2022 was slower than we anticipated. As noted above, we are doubling-down on this as one of the 2023 trends in CX and fintech.
BNPL growth fueling M&A. This year huge fintech Block acquired Afterpay, one of the largest buy-now-pay-later (BNPL) providers. Affirm, another major player, has been aggressively advancing their capabilities through acquisitions. We called this one right, and with “fintech winter”, we expect even more deals into 2023.
Cryptocurrency risks and impact on CX. We nailed this one. Last year we said, we “anticipate increasing consumer dissatisfaction with crypto companies as their customer service teams struggle to address account management issues and fraud.” Crypto companies with customer service teams? OK, maybe just that part was a miss. (But we still think it will be a must.)

We’d love your feedback on our 2023 predictions. Tweet at us @beyondthearc or tag us on LinkedIn. And now you can find @beyondthearc on Mastadon.

Our Beyond the Arc team is part of the tech and CX innovation ecosystem. We’re passionate about helping businesses take advantage of the 2023 trends in CX and fintech with innovative ideas, strategic services, and deep industry expertise.