C-suite executives plan to invest significantly into Web3, ESG frameworks and embedded finance during 2023, according to new research from FIS.
In its inaugural 2023 Global Innovation Report, FIS surveyed 2,000 executives from financial services and non-financial businesses about their key areas of financial investment in 2023.
Of respondents, 84% see both ESG and embedded finance having a major/moderate impact on FinTech this year. This was followed by decentralised finance (82%), the metaverse (80%) and cryptocurrencies (77%).
The report also found that 56% of financial services firms in the US believe ESG offers an opportunity to improve competitiveness in the market. Additionally, 60% of financial services firms are building new products and services.
Finally, 56% of financial services firms say they are investing in technology to improve reporting and disclosures, giving clients more transparency into ESG scores and/or providing more granular ESG ratings of assets and securities.
FIS global head of product strategy & web3 Himal Makwana said, “As the threat of a global economic slowdown looms and businesses look for ways to thrive through the downturn, it is evident that unleashing growth requires focus, top-down executive support, a culture of innovation, and collaboration to anticipate and shape to consumer demand.
“Our findings show that many executives see decentralized finance, web3 infrastructure, digital assets and currencies as critical components of their long term strategy, both from a defensive and offensive perspective, to help lead the way into this next phase of the digital revolution.”
FIS’ report found that a lack of ecosystem services to support crypto was cited as the biggest challenge with crypto, with 29% of respondents citing it. Other challenges were lack of interoperability between platforms (28%), and lack of clarity around regulations (26%) as key barriers to greater adoption within their organisations.
As for embedded finance, 36% of financial services firms will invest significantly in developing embedded finance products within 12 months. While 59% of non-financial firms that see an impact from embedded finance on their business will increase their tech or research and development budget this year.
In other ESG new, The Payments Association, an organisation that celebrates innovation and collaboration across payments, launched Project ESG.
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