According to a major new report, half of all fintech firms have put a stop to hiring staff in 2023 because of the challenging economic climate.
During the first half of 2022, over 4,000 fintech employees lost their roles across 45 companies, from mortgage lenders to firms processing digital payments, further highlighting the impact challenging financial times are having on the sector.
With a global recession looming, the development of financial software and the evolution of fintech innovations will have a larger impact on consumers than ever in 2023.
That’s all according to a new report – Exploring Fintech in 2023 – by Erlang Solutions, leading technology experts who work with companies globally to build and deliver transformative, scalable and innovative tech solutions.
Half (51%) of fintech firms are expecting to put a hiring freeze in place this year, with almost another third (31%) not ruling the idea out – and 16% already having a freeze in place.
Large and medium-sized fintech businesses are more likely to reduce their staffing levels than smaller firms, and large enterprises are nearly twice as likely to close offices or stores – and reduce software licences and seats – as their medium-sized rivals. This trend can be attributed to various factors such as the need to optimize operational efficiency, reduce costs, and enhance productivity.
Furthermore, it has also been revealed that larger enterprises are nearly twice as likely to close offices or stores, as well as reduce software licenses and seats when compared to their medium-sized counterparts. These measures are being taken by businesses to streamline their operations, improve profitability, and respond to changing market dynamics.
It is important to note that while such decisions can be challenging, they are necessary for businesses to remain competitive and thrive in a rapidly evolving landscape. By embracing new technologies and implementing innovative strategies, fintech businesses can not only survive but also grow and expand their reach.
Small businesses were more likely to be focused on setting their customers up for success in the event of a deeper recession.
The annual report, which brings together leading Fintech industry experts to examine the industry trends that are set to impact the year ahead, also looks at how the adoption of artificial intelligence (AI) is likely to continue to dominate in the sector over the year ahead – and at how companies can expect to see future regulatory developments over the coming months.
The agency argues that sustainability is no longer just a buzzword in fintech and will need to be at the heart of company cultures moving forwards, and the report also provides new insights on embedded banking and blockchain from those at the centre of the fintech revolution.
The report includes thought leadership from key industry figures including Francesco Cesarini, founder and Technical Director at Erlang Solutions, Chris Skinner, author and speaker, Irfan Khan, founder and CEO of tech provider mmob, Daniel Belda, Head of Product Strategy at OpenPayd, Gideon Malherbe, Chief Strategist at Vaulto, and Sunil Bhardwaj, CEO of Ezpays.
Erlang Solutions is a global technology company offering a unique mix of expert technical capabilities, world-class consultancy and a vibrant community. With over 20 years of experience of building massively scalable distributed systems, it builds and maintain transformative distributed systems for clients ranging from startups to Fortune 500s, including WhatsApp, Klarna, Pivotal, Motorola, Ericsson, Adidas Runtastic, Kivra, Pando Health, Pepsico and more.
Francesco Cesarini, Founder and Technical Director at Erlang Solutions, said: “While the threat of global recession brings challenges for fintech companies – and it’s true some may not survive – it’s clear that fintech has really supported consumers over the last few years of global challenges, and that it will continue to do so.
“As a people-focused consultancy, we want to support the creation of an industry that provides stability, flexibility and opportunity for customers and consumers alike. This is likely to involve greater co-operation to create a diverse ecosystem that works for all, and we hope our report helps to spark those conversations.”
