# Fintech trends in 2022: what’s next for crypto and ESG  Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-26 Category: TECHNOLOGY Category URL: https://financedigest.com/category/technology Meta Title: Unlocking Fintech Success in 2022 Meta Description: Discover how the booming UK fintech sector is embracing cryptocurrency and ESG integration, with insights on the $3 trillion crypto market growth and the URL: https://financedigest.com/fintech-trends-in-2022-whats-next-for-crypto-and-esghtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1360720440-1736815830585-compressed.jpg) _By_ **_Dima Kats,_** _CEO of Clear Junction_ Fintech is one of the big financial industry success stories of the recent era. In the UK alone the sector is booming and saw a massive inward investment of [$37.1 billion](https://home.kpmg/uk/en/home/media/press-releases/2022/02/uk-fintech-investment-soars-to-37-billion-in-2021.html) during the course of 2021. Indeed, since Q2 2020, first financings for fintech start-ups have [increased by 53.6%](https://www.svb.com/trends-insights/reports/fintech-industry-report), reversing the downtrend that was observed pre-pandemic. For the new entrants and established [players in the market](https://www.financedigest.com/sports-and-athletic-insole-market-players-eye-custom-and-3-d-printed-products-for-performance-optimization-says-future-market-insights.html "Sports and Athletic Insole Market Players Eye Custom and 3-D Printed Products for Performance Optimization, Says Future Market Insights"), there are two trending competitive opportunities in 2022. First, how to integrate ESG (Environmental, Social, and Governance) into investment [strategies using financial](https://www.financedigest.com/the-value-of-customer-centricity-to-c-suite-financial-strategy.html "The value of customer-centricity to C-Suite financial strategy") data; and second, how to seize the rising opportunities around the growth of cryptocurrency. The cryptocurrency boom started in the early 2010s and has helped contribute substantially to the huge [opportunities and media buzz surrounding fintech](https://www.financedigest.com/digitalisation-why-using-the-opportunity-of-fintechs-can-create-an-innovative-digital-client-experience.html "Digitalisation: why using the opportunity of Fintechs can create an innovative digital client experience"). In a little over a decade, we have gone from the creation of the first decentralised cryptocurrency to a market that is now estimated to be worth [more than $3 trillion](https://clearjunction.com/blog/history-of-cryptocurrency/). Despite initial concerns, [crypto has displayed long-term staying](https://www.financedigest.com/what-crisis-high-stakes-crypto-lending-looks-here-to-stay.html "What crisis? High-stakes crypto lending looks here to stay") power and will likely see government regulation soon to help ratify its validity. Meanwhile, over the last few years, many large [financial institutions](https://www.financedigest.com/a-cloud-migration-guide-for-financial-institutions.html "A Cloud Migration Guide for Financial Institutions") have committed to sustainable growth, and ESG is a key motivator for an increasing number of investors. Both [trends represent both opportunities and challenges for fintech](https://www.financedigest.com/the-fintech-revolution-trends-to-watch-in-2016.html "The Fintech Revolution: Trends to Watch in 2016"). Decentralised [technologies such as blockchain have wide-ranging applications across the sector](https://www.financedigest.com/why-its-time-to-centralise-public-sector-technology.html "Why it’s time to centralise public sector technology"), while innovative start-ups are entering the market to address the unmet ESG needs in the industry. **The new normal: the acceptance of crypto** Cryptocurrency has [come a long way since its inception a little over a decade](https://www.financedigest.com/global-hid-ballast-market-expected-to-decline-with-a-cagr-of-9-8-in-the-coming-decade.html "Global HID Ballast Market Expected to Decline with a CAGR of -9.8% in the Coming Decade") ago. What started as something of a gimmick has since [become a genuine alternative method of making payments](https://www.financedigest.com/2022-the-year-future-payment-trends-become-reality.html "2022 – the year ‘future payment trends’ become reality?"). While most people who own crypto likely see it as an investment, this is something that will [change in the coming years](https://www.financedigest.com/1-in-10-workers-considering-a-career-change-in-the-next-year.html "1 in 10 workers considering a career change in the next year") as it becomes ever more institutionalised. [Investment in the crypto and blockchain space soared](https://www.financedigest.com/cepsa-to-nearly-double-investments-over-next-3-years-as-profit-soars.html "Cepsa to nearly double investments over next 3 years as profit soars") in 2021, rising from $5.4 billion in 2020 to more than $30 billion last year. If anything, the pandemic accelerated the [rate at which cryptocurrency seemed to be a viable means of buying](https://www.financedigest.com/cryptoverse-buying-the-dip-bitcoins-a-rates-rookie.html "Cryptoverse: Buying the dip? Bitcoin’s a rates rookie") and selling goods and services, but now we appear to be out the other side of covid, that does not necessarily mean that interest in crypto will abate. There are many benefits to cryptocurrency: transaction costs are generally low, they can be [made at any time](https://www.financedigest.com/analysis-financial-literacy-or-luck-the-year-small-time-traders-made-a-big-impact.html "Analysis-Financial literacy or luck? The year small-time traders made a big impact") day or night, and there is often no limit on how much can be sent, received or withdrawn. While these benefits explain the rise of cryptocurrency, the decentralised nature of [digital currencies](https://www.financedigest.com/minding-the-gap-the-importance-of-inclusive-financial-strategies-as-digital-currencies-rise.html "Minding The Gap: The importance of inclusive financial strategies as digital currencies rise ") is what has kept people interested. Now that many central banks are considering developing their own digital currencies – and traditional banking giants are investing huge sums in [crypto – it is time for fintech and crypto exchanges](https://www.financedigest.com/exclusive-binance-moved-346-million-for-seized-crypto-exchange-bitzlato-data-show.html "Exclusive-Binance moved 6 million for seized crypto exchange Bitzlato, data show") to find a means of working together in a way that benefits all. The simple fact is that exchanges generally do not have the infrastructures required to facilitate the buying and selling of [crypto – hence why payments solutions providers like Clear](https://www.financedigest.com/crypto-firms-will-develop-offshore-without-clear-us-rules-coinbase-chief-says.html "Crypto firms will develop ‘offshore’ without clear US rules, Coinbase chief says") Junction work with exchanges. There is still more work to be done, but the hope is that traditional banks, crypto exchanges and payments solutions providers can find a means of facilitating the widespread use of crypto in ways that resemble the modes of transacting that have existed for much longer. **ESG integration: [creating a sustainable](https://www.financedigest.com/creating-sustainable-value-through-responsible-investment.html "Creating sustainable value through responsible investment") future** While cryptocurrencies are no longer in their infancy, there are still some [technological advancements that would make them more attractive to more established financial](https://www.financedigest.com/shakedown-on-horizon-for-financial-technology-world.html "Shakedown on horizon for financial technology world") institutions. The sustainability of current cryptocurrencies in particular has been a noted Achilles’ heel, but as crypto improves its sustainability we might even begin to see its [increasing integration](https://www.financedigest.com/increase-your-business-efficiency-with-integrated-labels.html "Increase your Business’ Efficiency with Integrated Labels") with ESG initiatives. There are other positive social implications of cryptocurrency, such as their accessibility, which suggests they may be more suitable as part of ESG initiatives than previously thought. ESG is a growing area of interest to both [venture capitalists and the government,](https://www.gov.uk/government/news/uk-fintechs-chosen-to-showcase-groundbreaking-esg-green-finance-solutions-during-new-york-climate-week) and fintech is well-positioned to capitalise on this. Fintech companies already naturally deal with a significant amount of [financial data](https://www.financedigest.com/how-data-governance-as-a-service-can-transform-the-financial-sector.html "How Data Governance-as-a-Service can transform the financial sector"), all of which can be analysed and shared with government and private bodies to help them optimise their financial strategy for developing ESG guidelines. Some fintech companies have already started to move into the new [area of ‘green finances’](https://www.financedigest.com/4-areas-of-finance-you-should-be-watching.html "4 Areas of Finance You Should Be Watching"), and have made it their business model to help other companies develop and maintain sustainable financial practices. Transparency will be [key for fintech](https://www.financedigest.com/2023-fintech-prediction-secure-and-private-data-usage-is-key.html "2023 FinTech Prediction: Secure and Private Data Usage is Key") and ESG in 2022 in order to maximise these opportunities. Much like cryptocurrency, industry leaders who understand both cryptocurrency and ESG – and how to integrate cryptocurrency into a financial strategy that still meets ESG goals – will attain a significant [competitive advantage](https://www.financedigest.com/turning-big-data-compliance-into-a-competitive-advantage.html "TURNING ‘BIG DATA’ COMPLIANCE INTO A COMPETITIVE ADVANTAGE") in such a rapidly evolving market. **Improvise. Adapt. Overcome. A year of opportunity.** Cryptocurrency’s long-term staying power has become a [key issue for fintech](https://www.financedigest.com/3-key-ways-you-can-transition-from-finance-to-fintech.html "3 key ways you can transition from finance to fintech") and wider financial institutions, who need to establish precisely what their stance is on both it and its underlying technologies. Its increasing mainstream appeal, regulation, and the prospect of reliable interoperability between blockchains will likely see it continue to grow in importance to the financial industry as a whole, while its benefits in [cross-border payments](https://www.financedigest.com/why-blockchain-could-represent-the-future-of-cross-border-payments.html "Why blockchain could represent the future of cross-border payments") make it an attractive venture for innovative fintechs. ESG is another potentially lucrative area for sector leaders to take advantage of and it will continue to grow in importance as the world puts a [greater value](https://www.financedigest.com/iris-acquisition-enables-accountants-to-add-greater-value-to-their-clients.html "IRIS acquisition enables accountants to add greater value to their clients") on sustainability following last year’s COP26 conference. Consumers and investors will start to make decisions based on ESG criteria, particularly in otherwise relatively homogeneous markets, and getting ahead of the curve while being able to demonstrate their own ESG credentials is going to be increasingly important for the [next wave of fintech](https://www.financedigest.com/the-next-wave-of-fintech-is-here.html "The Next Wave of Fintech is here") start-ups. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---