Changes happen: pandemics, Google algorithm shifts, new cyber security issues, and other variations in our physical and digital world that upend the pre-paved path. It would be nice to look into a crystal ball and predict the challenges that lie ahead in 2022. 

Fortunately, many experts agree that 2022 will be an excellent yet volatile year. Below are eight predictions likely to happen in 2022 and the associated small business risks. 

1. Financial Institutions Will Increase Spending for Innovation

Banks will reach double-digit spending growth on tech in 2022. The US and China are taking the lead, putting a higher demand on technology talent to fill these competitive positions.

Fintech, or financial technology, is used to augment a streamlined and digitized banking system. If you have ever deposited into your bank account by taking a photo of a check, you have utilized fintech software.

As technology has flourished, banks can keep pace or be left behind. Providing a state-of-the-art digital experience has become necessary for financial institutions to adopt. 

DXP or digital experience platforms are on the rise and succeed at meeting bank customers’ needs and lowering their transaction costs. 

2. AI Integration

South Africa granted the first patent to an artificial intelligence system this year, revolutionizing the way we think of creative machines and legally recognizing their innovations.

New developments in AI have set the stage for further results and future patents expected in 2022. 

Banks continue to implement AI to decrease backend processing and reduce fraud. But AI integration is happening in nearly every industry. 

Perhaps the most significant AI achievement will presumably commence in 2022: AI-supported software development.

3. More Targeted, Personalized Ads

We have seen personalized ads increase steadily over the past decade. In 2022 targeted ads will become the norm in identifying and capturing new potential customers and clients. Companies not directly scrutinizing their customer’s buying activities will be left behind.

We live in an age where our data is ubiquitous. After we make a purchase, it is recorded, stored, and analyzed by hundreds of companies, all with one goal in mind, to place ads in front of you where you are more likely to act.

Television has historically been the top-dollar producer of advertising campaigns, and Deloitte Global predicts that TV ads will become more personalized in 2022 in a phenomenon known as “connected tv.” Much like social media has been doing for years, households can expect to see different ads based on their buying habits when watching their favorite TV shows. 

In 2022 alone, personalized TV ads are estimated to bring in around $7.5 billion globally, and this number is over 40 times higher than was forecast in 2012. Even though viewing hours are in decline due to apps like Netflix, TV advertising prices continue to increase.

4. Time Spent with Traditional vs Digital Media Marketing 

Over the last decade, overall media consumption has risen by 20.2%. This increase is mostly due to digital media expansion. In 2021, US adults averaged around 463 minutes of digital media per day. 

Digital media firms like Media Beyond are dominating the advertising space. Traditional media has been on a slow, steady decline. In 2022, traditional media will be 30% less than where it was in 2011.  

We are only at the beginning of media availability.

In 2022 the first low earth orbit satellites (LEO) will change the lives of billions of people worldwide. These satellites have an end goal of providing affordable broadband to every corner of the planet. 

5. Brands Competing with Marketplaces

E-commerce sales continue to break sales records every year. Of course, this is great news if you operate a large marketplace such as Amazon. Shopify recently disclosed a 46% increase in sales between 2020 and 2021. 

However, for small boutique retailers, using a marketplace to sell items can be a love/hate relationship.

In the past, it was a vendor’s dream to partner and sell their merchandise with a large marketplace under the expectation that sales would increase dramatically. Due to tight profit margins and lack of customer interaction, smaller brands will turn the tables on these large enterprises. 

By implementing global order management software, brands have discovered they can do a lot of the heavy lifting themselves while enhancing direct relationships with their customers.

Small companies can implement order management, conversion rates, subscription billing, and inventory control. These smaller brands are empowered to have a voice in today’s E-commerce world. Thus, these brands can retain their profit margins while expanding and growing their business the way they want. 

6. Heightened Security Attacks

We have already seen how cryptocurrencies attract cyber-attacks. But this is just one example of internet security flaws that have recently fallen victim to attack. 

In 2020, 27.8% of companies reported 20+ supply chain disruptions, an enormous increase from 4.8% in 2019. Firms are now trying to make their supply chains more resilient by changing their course from offense to defense. 

Implementing third-party tools to prevent security breaches also means more security attacks are likely. Small businesses can coordinate their safeguards by employing tools to help with risk assessment, supply chain mapping, and real-time business intelligence. 

In addition to small business security breach increases, consumers are also victims of identity and data breaches. 

With Facebook whistleblowers and Google’s decrease in security and privacy, customers now think twice about willingly sharing their data.

7. Sustainability 

Understanding the value of sustainability is more prominent within the public sector. Europe is leading the environmental initiative, and many other countries are close behind.

There is an increase in awareness of the importance of sustainability perceived by job-seekers, investors, and consumers alike. This trend puts pressure on companies to increase their transparency with regard to their environmental friendliness.

The 2021 IPCC Report from the UN clarifies the critical need for immediate and drastic climate action. Numerous reports of this nature combined with public pressures have made many organizations flip their climate and sustainability stance. 

8. COVID Is Not Going Away

“When is the COVID-19 pandemic going to end?” “When will things get back to normal?”

These questions have plagued us for almost two years now. For a while, they became so common that many of us have stopped asking them. It is easier to accept the big takeaway that we now live the new normal.

Fortune has predicted that by 2022 COVID will become endemic. Meaning the pandemic will not end with the virus disappearing altogether. However, as enough people gain immune protection from the vaccine, there will be less virus transmission. Hopefully, effective new treatments will lower deaths, and it will soon become a more manageable threat.

COVID is here to stay, at least for the foreseeable future. 

Summary

The future is always uncertain. But with the coronavirus not going away and our ever-changing societal landscape in constant turmoil, our connections with each other and our customers will continue to thrive in the digital world. 

A world of untapped possibilities is just around the corner. 

Hang on. 

It’s going to be a bumpy ride.

 

Want to keep abreast of common accounting knowledge and strategies for your small business? Visit FINSYNC to help navigate the hurdles and put your accounts in sync.