Fintech Trends to Watch for in 2024
Introduction
The fintech sector is growing exponentially, driven primarily by technological advancements and customer demand. With many traditional players shifting towards fintech, the market has witnessed M&A in recent years. More high-profile deals are expected in 2024, boosting the wider market.
Salient fintech trends to watch for in 2024
Cybersecurity: protection against increasing cyber threats in the evolving fintech landscape
The alarming number of cyberattacks, occurring mainly due to more opportunities available for cybercriminals to exploit vulnerabilities and steal sensitive financial information, indicates that financial institutions and fintech companies would be able protect themselves by implementing best practices and leveraging the latest technologies such as artificial intelligence (AI) and machine learning (ML). These advanced technologies would help companies identify fraudulent activity, although concerns around cybersecurity will likely continue in 2024.
Open banking: the future of payments
The development of open banking, mainly catalysed by the increased penetration of smartphones and the evolution of technology, has enabled digital banks to take advantage of interconnected IT architectures.
Neobanking: a convenient alternative to traditional banking
Neobanks are likely to disrupt the banking sector, compelling traditional banks to invest in technology and redesign processes to deliver a fast and seamless customer experience.
Generative AI and ML: transforming customer experiences
Fintech firms, along with traditional banks, will continue to invest heavily in GenAI in 2024 to keep up with market demand in order to significantly enhance efficiency and personalised customer service. GenAI adoption would reshape fintech operations and aid in strategic decision-making
Buy now, pay later (BNPL): appealing to a broad spectrum of customers
Fintech companies are reporting growth in the volume of BNPL payments, with major players such as Klarna, PayPal and Afterpay aiming to shore up market share in a highly competitive sector. Overall, BNPL transactions globally are expected to grow in 2024, and it would be strategically important for retailers to make the BNPL option available to shoppers who may otherwise abandon their shopping carts.
Sustainable finance and climate fintech: key to the future of decarbonization
Capital is likely to continue flowing towards sustainable projects in 2024. Investors’ links to green bonds and renewable-energy projects are likely to increase through fintech platforms. Additionally, technologically advanced tools such as AI-powered tools would be used to a greater extent to analyse ESG data to empower investors to make informed decisions aligned with climate goals.
Insurtech: disrupting the insurance sector through fintech solutions
We expect increased adoption of emerging technologies such as AI, ML and smart data analytics in insurance in 2024. Such technologies would present new opportunities for business and increase operational efficiencies. On the customer side, the adoption of new automation in insurance would lead to a seamless experience.
How Acuity Knowledge Partners can help
We are the world’s leading provider of research and analytics support to the financial services sector. We keep abreast of developments and enhancements in the fintech space and offer a wide range of tailored solutions and capabilities including market assessment, competitive landscape and positioning, competitive benchmarking, opportunity assessment and market-entry strategy. Our services deploy technology, research and data expertise, ensuring that the research we provide is technology-backed, is based on exhaustive data points and is driven by the best insights. Our services are supported by our proprietary suite of solutions – Business Excellence and Automation Tools (BEAT) – that combine our domain expertise with contextual technology. We currently support the world’s top financial services and fintech firms with our team that offers coverage across geographies.
About the Author
Anamika Deshwal is a part of Acuity Knowledge Partners – PE & Consulting team, wherein she has worked on projects for numerous clients across sectors including technology, financial services,and payments.Her functional expertise includes strategic research, company profiling, competitor analysis & benchmarking, besides GTM market studies.Anamika holds a PGDM in Business Analytics from IMT Ghaziabad and BE in Electronics and Communication from Chitkara University, Himachal Pradesh
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