The fintech market is growing rapidly with its numerous fintech innovations coming up! From digital wallet solutions to NFC technology, every innovation has become successful in the long run.
So, it becomes necessary for businesses to stay afloat with the top fintech trends and predictions to lead the market like a PRO. Morеovеr, a study suggests that thе global fintеch markеt was valuеd at $226.76 in 2023 which is projеctеd to grow to $917.17 billion by 2032. And this is another reason to see the fintech trends eye-to-eye!
In this blog post, you will gеt a go-through with thе top fintеch trеnds and predictions for thе yеar 2024 to stay ahеad of thе compеtition. Let’s get started!
Top FinTech Trends in 2024
FinTechs have been revolutionizing the financial industry for the past few years, and the trends in this field continue to evolve and shape the future of finance. As we enter 2024, some of the top fintech trends to watch for include:
AI and ML will become mainstream
Did you know that AI in the fintech market is expected to reach up to $49.43 billion by 2028?
The above statistics state clearly that AI is going to be the new normal. After the biggest AI innovation chatbot came into the picture, there’s a flood of AI tools and chatbots across the globe. But, fintech is leveraging AI and ML as more than just a tool, making them the future of fintech.
Fintech utilizes AI and ML for these reasons:
- Chatbots embedded with the fintech solution to assist customers when they have queries or want to know more about your offerings.
- Analyze data in real-time, ongoing transaction monitoring to flag suspicious activities and enhance payment data security for customers.
- AI with predictive analytics helps analyze historical data with ML algorithms to offer accurate financial predictions for informed business decisions.
- Automate onboarding, document verification, and checks to stay compliant with the regulations. Utilize human resources in more valuable tasks.
Open banking API stimulates easy access
Open banking APIs enable banks to share their financial and user data with firms other than financial institutions through APIs.
This unique API system:
- Enables easier access to financial data through secure connections.
- Allows more financial services integration in third-party apps.
- Enables smoother data sharing and innovation in fintech.
A study suggests that the global transaction value of payments via open banking is expected to reach $330 bn by 2027. As adoption grows, open banking can transform customer experience and encourage innovative financial services.
Virtual cards - The contactless trend
Virtual cards for businesses have become prevalent due to customers’ constantly evolving behaviors and the need for more and more convenience and security of payments. One of the major reasons is the fintech market trends showing a rise in contactless and cashless transactions.
Virtual prepaid cards can be stored directly in your mobile banking or mobile wallet app and can be used to make payments by just tapping the phone to the payment terminal. Currently, there have been more than 36 billion virtual card transactions performed which will rise to 175 billion by 2028.
SaaS solutions will rise
With the rise of digital fintech solutions all across the globe, businesses will largely benefit from their SaaS versions. For example, a SaaS-based digital wallet solution has become popular due to its customization capabilities, cost-effectiveness, tailored solution, scalability, security, and compliance.
Moreover, there are other SaaS versions of fintech products moving in the same direction such as banking-as-a-service, remittance-as-a-service, card-as-a-service,eKYC-as-a-service, and more. Bottom line - SaaS has become a successful latest trend in fintech space.
Embedded finance for every business
Embedded finance integrates financial services directly into non-financial environments. This allows businesses to provide relevant financial products seamlessly within their existing customer experiences.
From insurance on e-commerce sites to financing on mobile apps, embedded finance has gained adoption as the top fintech trends making financial services omnipresent across industries.
- Allows businesses to offer customized financial services through APIs
- Streamlines customer experience by reducing steps to access financial products
- Helps companies generate additional revenue streams beyond core offerings
- Modernizes legacy financial products to align with digital experiences
Neo banks - The digital-only revolution
Nеobanks is a digital fintеch solution disrupting the banking industry by offering digital-only financial sеrvicеs without physical branchеs. Built for thе mobilе agе, nеobanks havе bееn onе of thе popular fintеch trеnds that provides a strеamlinеd usеr еxpеriеncе with innovativе fеaturеs to mееt modеrn consumеr dеmands.
Thеsе banks providе virtual banking sеrvicеs likе P2P transfеrs, intеrnational rеmittancеs, contactlеss paymеnts likе QR codеs and budgеting and financial managеmеnt, chatbots, loan products and morе.
Read More: All you need to know about neobanks
Biometric adoption for enhanced security
Biomеtric authеntication has bеcomе a major sеcurity fеaturе for еvеry digital fintеch solution out thеrе. Thе major rеason is that it offеrs advancеd sеcurity in digital paymеnt apps by scanning thе physical charactеristics of usеrs likе facial scans, iris scans, fingеrprint scans, and morе.
The new and upgraded version of this security feature like liveness detection is also emerging as one of the latest fintech trends. It checks the legitimacy of the customer by scanning the live selfie or video capture. This feature is amazing for real-time fraud detection.
Fintech-banks partnerships
We will see more and more fintech-bank partnerships. These partnerships have turned out to be the B2B fintech trends that have gained momentum quickly. The reason behind this is the innovative financial services that fintech offers are a must for banking consumers as well.
So, banks partner with fintech and opt for a solution they offer as that is necessary for a banking app.
For example, banks implement international services into their mobile banking application so that customers can get all the necessary services under one roof. Many banks are even creating their own fintech solutions to stay afloat the market needs.
Buy Now, Pay Later (BNPL)
The fintech global trends that talk of the fintech market are BNPL services! Buy Now, Pay Later (BNPL) services are gaining significant traction globally across e-commerce and point-of-sale purchases.
Allowing consumers to make installment payments for online and in-store purchases, BNPL provides greater flexibility and convenience. Additionally, the global market for BNPL is expected to grow to $9226.65 Bn by 2032.
P.S. - As BNPL solutions get embedded at checkout, they are becoming an integral part of consumer spending habits and patterns.
Fintech predictions by experts - 2024 edition
Every year, the fintech experts share their personal views on how the industry will turn out for the new year. The fintech industry keeps on growing but some predictions are always better than others.
Here are the top fintech predictions from the latest fintech report on what will transform the fintech landscape significantly according to the experts.
Embedded finance will become the norm
Talking about embedded finance, Piers Marais, Chief Product Officer at Currencycloud, predicted that:
- Embedded finance is “finance everywhere” enabling a smooth integration of financial services in non-financial third-party apps.
- Advanced APIs and easy access to AI & ML will create a personalized customer experience.
- B2B embedded finance will keep on rising due to the need to offer efficient and innovative financial services to customers.
- Banks and financial institutions will have to become more adaptable and customer-oriented to leverage its benefits by providing customizable solutions via APIs.
Banking is transitioning greatly
Reinhard Höll, Partner at McKinsey & Company shared his expert insight on the digital transformation of banking:
- Rising interest rates have boosted profits for banks in a more beneficial credit environment in the previous 18 months.
- More than 70% of net inflows into the financial system led to off-banking balance sheets.
- The transition will be shaped by 4 global trends: Increasing technological advancements, vast and in–depth regulatory checks, evolving macroenvironment, and changing risks.
- Banks must utilize the latest technologies, stay compliant at all levels, level up their distribution, and adapt to evolving risks.
AI-powered innovation with security
Charlie Sanderson, Head of Global Financial Service at Amazon Web Services suggests that generative AI will transform financial services:
- Leading fintech firms, banks, and financial institutions will leverage its power to enhance customer experience, understand market demand, innovate, and increase productivity.
- Compliance analysts and loan officers can leverage generative AI to generate real-time accurate reports and documents.
- Investment advisors can automate the analysis of investment risk profiles and suggest tailored portfolios.
Mainstream integration of AI & financial regulation
Krik Gunning, Co-Founder and CEO at Fourthline, expressing his views about AI and regulations, made the fintech predictions as under:
- There will be an extensive leveraging of artificial intelligence to comply with AML regulations
- AI for AML will enable banks, fintech, and FIs to achieve financial system integrity accurately, automably, and efficiently.
- AI will become very important in managing large volumes of fraud activities occurring in new technologies
- AI should be embraced only after understanding key issues like providers' track record, their response to regulators, and how they think about data security.
Conclusion
2024 is going to be a fintech success year, with the above top fintech trends and predictions in play. For fintech businesses, these trends and predictions will generate profits, increase operational efficiency, minimize costs, and bring security & compliance to the center stage with new and better technologies, innovations, and services.
How DigiPay.Guru can help?
DigiPay.Guru is a top-notch fintech solution provider that offers varied digital fintech solutions to banks, fintech, financial institutions, telcos, and more. Our solutions are designed while keeping the latest fintech trends and predictions in mind. It's automated, tech-savvy, in digital mode, and even has contactless capabilities.
Moreover, we focus on offering next-level security in every solution, so that your customers can perform transactions with peace of mind and zero security risks. Our fintech solutions are white-labeled, customizable, scalable, and focused on inducing financial inclusion.
