FINTECH FUTURE TRENDS 2024

the year 2023 was a robust yet challenging year for the fintech industry despite witnessing steady growth driven by digital Innovation and further evolving consumer Behavior we also saw higher interest rates a tightening of the money supply to fintech startups and other macroeconomic headwinds leading to funding Wars layoffs and fex reigning in their spend and even some closures as McKenzie recently put it the Decades of hyper growth have now led to a new era of value creation where the focus is on sustainable profitable growth as we venture into 2024 we expect the landscape to evolve even further the macroeconomic climate will continue to reshape the market in 2024 however experts are cautiously optimistic about the new year as fintex across the globe recalibrate their models for 2024 so in this video we'll explore the top 10 fintech Trends to look forward to in 2024 we'll look not just at the emerging technology Trends and how they apply to financial services but also the state of the fintech industry and how differently we can expect key players to behave and navigate the dynamic sector that is fintech if that sounds interesting to you then let's chat about [Music] it Hello friends welcome back to the channel my name is Jeremy and if you're new here and haven't yet subscribed please consider doing so because on this channel I speak about fintech digital transformation and agile strategy 2024 is set to be an exciting year for fintech here are 10 of the top trends set to shape the year and the future of fintech generally first we have Central Bank digital currencies set to take off cbdcs which are a form of digital currency issued by a country's Central Bank are similar to cryptocurrencies except that their value is fixed by the central bank and equivalent to the country's fiat currency in 2024 the expectation is that Central Bank digital currencies will move Beyond theoretical discussions to practical implementations specific cbdc use cases will emerge propelling these digital currencies into the next phase of growth and adoption several countries including Nigeria Jamaica and the Bahamas have already had their cbdcs launched and larger Nations like the European Union Canada Brazil and the United States are actively considering launching their own cbdcs the European Union is currently proposing a legal framework for their digital Euro and the Atlantic Council Central Bank digital currency tracker indicates that plans for cbdcs are in progress in many other countries Regulators like the bank of Ghana are a prime example of a unique approach to the development of cbdc utility to ensure that the launch actually does bring value to Consumers the bank of Ghana at the end of 2023 launched a cbdc hackathon after piloting both online and offline use cases of the E City this hackaton invited individuals and teams from The Tech Community to contribute in innovative ideas that leverage a cbdc infrastructure to prototype Solutions and develop tools that address real problems for consumers and it's because of deliberate efforts from Regulators like these that 2024 is set to be a good year for the Ascension of Central Bank digital currencies in the fintech domain next are artificial intelligence use cases in fintech now I would be remiss if I didn't include AI to this list just based on all the hype it has received in the last year particularly since the release of open AI chpt at the back end of 2022 the world has been forced to sit up and take notice of the potential of artificial intelligence to disrupt several Industries in countless ways but the hype is warranted and particularly in the field of financial services AI is poised to receive even more attention in the new year as the VP of financial services as Nvidia put it fintech firms and financial service providers generally are prioritizing the imperative to put AI first by bringing the computing power to the data and not the other way around the typical use cases that will become even further entrenched are the used for AI in fintech for fraud detection enhanced customer service personalized banking services algorithmic trading improved user engagement secure payments process Automation and databased decision-making however what is predicted to take Center Stage are the use cases for generative AI in financial services gen AI models are fairly easy to build the challenge in fintech lies in applying them with the most impact and the least risk the growing list of us cases include chat Bots and knowledge interfaces to support call centers and in Branch agents reducing call handling and training requirements AI generated personalized and targeted content at scale to drive more efficient marketing campaigns determining credit worthiness gen AI allows for the synthesization of all kinds of data whether structured or unstructured from a range of sources ensuring lending decisions with greater accuracy surfacing information for relationship managers and financial advisers maximizing personalized interaction and these are just a few of the examples of the application of AI in fintech gen AI will bring a new source of insight that can augment and automate the core processes of fintech and that's where it will make a real difference next we have embedded Finance the integration of financial services into non-financial platforms is set to Skyrocket we have e-commerce sites offering loans social media platforms introducing payment functionalities and payment facilitators like PayPal stripe and square embedding into everyday payment experience characterizing The Surge of embedded Finance in 2024 as more platforms leverage fintech infrastructure and apis to embed Financial Services into their offerings the aim is to create new revenue streams and enhance Customer Loyalty for the platform by offering seamless tailored and personalized Financial Solutions to users this allows users to manage their finances conveniently without leaving their favorite apps and eliminates the need to switch between multiple apps offering a more streamlined and userfriendly experience now according to analysis by deal room the market for embedded Finance Solutions is projected to achieve a value of $7.2 trillion by 2030 this explosive growth will be driven by the Confluence of Trends in fintech like the rise of open banking the increasing adoption of mobile wallets the growing demand for personalized Financial Insurance lending and payments including branded credit cards we're going to see more use cases for embedded payments embedded insurance and embedded lending and these tools are not just enabling seamless integration of financial services into non-financial platforms but orchestrating a fundamental shift in how we access and manage our finances next is the rise of super apps super apps are becoming increasingly ingrained in consumers lives serving multiple needs within one platform they offer a onstop portal for various services with exponential growth expected due to their convenience platforms like WeChat grab go and alipe have revolutionized the digital landscape by aggregating diverse Services their continued growth and expand expansion into various sectors are projected to reach an estimated $887 billion by 2033 the future of super apps looks bright with many experts predicting that they will continue to grow in popularity and influence in the coming year super app providers will likely continue to prioritize user experience and convenience offering new features and services that make life easier for the users integrating with emerging Technologies such as blockchain and augmented reality to provide even more value and as the popularity of super apps grow competition among them is likely to increase as well with new entrance seeking to challenge the established players overall we're likely to see this future of super apps shaped by a combination of technological advancements market trends and user Demand with super apps having the potential to transform the way we live work and interact with each other next we have the expansion of open banking 2023 was a huge year for open banking adoption in the UK for example open banking adoption surged by 68 .2% from the previous year to hit 4.2 million users by July 2023 because open banking enables consumers to provide thirdparty providers with secure access to their payments account meaning that payments can be made through these thirdparty providers directly from their payment account without the need for cards and more people using open banking for payments in 2024 consumer expectations for open banking are likely to increase dramatically consumers will demand higher levels of speed convenience and security around open banking as a payment method as a result there will be renewed focus on the availability and performance of apis and user interfaces 2024 will see a stronger emphasis placed on consumer protection from fraud and scammers a key differentiator to open Banking and card payment is the liability protection offered by cards through the disputes and chargeback processes merchants and consumers alike want the power to protect themselves with tools and processes to limit Financial exposure as such to grow in the coming year third part providers will need to develop and Implement enhanced risk and fraud prevention tools to help Drive confidence in payment channels and mitigate concerns around exposure next is buy now pay later becoming mainstream the rise of bnpl has been one of the key trends in financial services in recent years with the likes of Clara scy pay Alma afterpay divido and cl pay are some of the key binal pay later names bmpl as a financial option powered by fintex has gained immense popularity globally based on on Research by Grand View the bnpl market is estimated to have a Kar of 26% from 2023 to 2030 being a flexible financing method that enables purchasing products and paying for them in long term without interest rates in some cases the bnpl model has gained popularity among consumers this model is particularly appealing to the millennial and ex Generations who demonstrate a greater sense of financial responsibility and concern for their credit history bmpl Services designed for businesso business transactions will emerge as critical fin financing tools for small and medium Enterprises these Solutions aim to address financing gaps providing smmes with accessible and flexible financing options for instance when bnpl providers partner with retailers and create Integrations with e-commerce platforms sales tend to Surge moreover consumers feel more inclined to make a purchase resulting in a boost in the retailers revenue and this is why bmpl has evolved as a fintech industry Trend that will further intensify in 2024 next we have the maturation of decentralized Finance or defi a def's Evolution continues offering more sophisticated and secure decentralized applications or adaps expect advancements in lending borrowing and yield farming focusing on scalability and Regulatory Compliance in 2024 defi enters a transformative phase marked by maturation and expansion lending and borrowing protocols will be refined further decentralized exchanges are set to introduce Innovative features and decentralized insurance platforms might expand expand coverage and introduce more customizable Insurance products fintex have the potential to play a prominent role in the development and Adoption of defi by partnering on defi projects building defi infrastructure such as user-friendly wallets and platforms and Building Bridges between Defi and traditional Finance overall the participation of fintex in defi is expected to accelerate the growth and Adoption of this Innovative Financial ecosystem the collaboration between fintex and D5 projects has the potential to reshape the future of Finance creat a more open inclusive and efficient Financial system next is the fact that profitability remains key as a yard stick for measuring fintech performance the word profitability has been emanating from the mouth of many fintech CEOs in recent times as startups opt for profits over growth now amid a difficult economic environment the experts say there will be an hus on fex to be in the black in 2024 many fintex will continue to prioritize Paving a quick path to profitability as various pressures including High interest rates weigh on the ability to grow at all costs the microeconomics and the market generally are unlikely to improve greatly in 20124 however fintex have refocused and are better equipped to cope with the volatility the recent trends for startups to focus on first principles will continue with profitability being the number one priority over growth next we have selective and strategic fintech funding for the year 2024 it's believed that fintech funding in 2024 will be more selective and strategic as investors look for quality over quantity and value over valuation I think we will see more funding going to fintech segments that are proving their resilience and potential such as embedded Finance digital assets AI powered advisory and asset management generative Ai and blockchain Integrations I also think we will see more funding going to fintech markets that have high demand and opportunity such as crossborder Financial Solutions full stack Evolution Rec Tech and compliance Financial inclusion and literacy and fintech and htech convergence I think we will see fewer unicorns being formed as the market becomes more mature and realistic and more early stage startups getting a boost as they find their product Market fit and Niche I think the overall fintech funding in 2024 will be slightly higher than in 2023 as the market finally fully recovers from the effects of the pandemic and the regulatory uncertainties end as fintech Innovation and adoption accelerates now finally Fint consolidation in 2024 will be more frequent and diverse as fintech players look for synergies and efficiencies and as the market becomes more competitive and saturated I think we will see more fintech merges and Acquisitions both within and across fintech segments as fintech players seek to expand their offerings capabilities and customer bases for example we could see more fex merging or acquiring non-bank Financial companies as they look to leverage their licenses capital and network we could also see more fintechs merging or acquiring other fintechs as they look to enhance their value propositions different iation and Innovation for example we could see more finex merging or acquiring digital asset platforms as they look to tap into the growing crypto and token economy I think we will also see more fintech collaborations and Partnerships both with fintech and non-tech players as fintech players seek to create more value and convenience for their customers and as the market becomes more open and interoperable we could see more fexs collaborating and partnering with data providers borrower agents lenders and derived data Partners as they seek to deepen the St in the financial services ecosystem so friends there you have it I hope you found these Trends insightful and useful and if you do remember to hit the like button and leave me a comment let me know what your predictions are for fintech in 2024 I'm Keen to know have an amazing week and I'll see you in the next video cheers guys

Channel: Jeremy Quainoo

Views: 1,546

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Id: X2F9diImZMU

Length: 14min 56sec (896 seconds)

Published: Mon Jan 08 2024