The past year has been turbulent on many fronts. Constant life changes have become the new normal for businesses around the world. The way people live and interact with each other will continue to change.
The trends of 2024 in the fintech sector are already clearly visible. Here we would like to structure these trends and suggest the most significant developments.
The Main 5 Global Fintech Trends
In our complex financial world of money movements, some important shifts have appeared. These changes are altering how we handle finances, invest and make transactions in the financial sector. The trends include a range of advancements from decentralized finance to more use of artificial intelligence and machine learning in services related to finance. As fintech keeps changing old banking and investing ways, the need for fintech testing for applications becomes extremely important. The importance of making sure these applications are dependable, safe and work smoothly is very high. This is because they have a deep effect on people, companies and the worldwide economy.
1. AI in Fintech
Artificial Intelligence (AI) was initially seen as a trend of the future, and today it has infiltrated almost every area of the internet. However, as more and more applications incorporate embedded AI programs, 2024 could be the year when AI becomes widespread.
As a result, AI and fintech will inevitably collaborate in the future as AI becomes useful for a variety of purposes, including data warehousing, fraud prevention, predictive modeling, user empowerment and experience, etc. The potential of AI is limitless, and its impact on other areas could be more serious. However, it won’t be long before AI starts to utilize its capabilities in the financial sector as well.
2. Cashless Transactions
During the COVID-19 pandemic, most transactions moved online, driven by social distance policies and public health needs. Mobile wallets, contactless credit and debit cards and other financial technology initiatives took center stage as the primary digital payment methods.
The introduction of Apple Pay allowed the company’s consumers to make payments quickly and conveniently using iPhones and later Apple Watches. Google Pay and Samsung Pay were later added. Fintech innovation is likely to lead to further changes in the payment environment in some sectors, such as public administration and education.
3. Crypto Assets
Cryptocurrencies have gained the most popularity this year. This is due to the fact that cryptocurrencies are now available to everyone, and many financial institutions, service providers and technology providers have started working with cryptocurrencies in retail and wholesale transactions. In addition, interpersonal payments using cryptocurrencies are becoming more and more relevant. It’s fast, secure, with low fees and a host of benefits that make them a major trend this year.
4. Sensible Contracts
Smart contracts allow parties to enter into contracts using digital signatures expressed in computer language, or more precisely, cryptographic keys. The execution of smart contracts is guaranteed to be accurate and predictable.
Smart contracts make it difficult to verify the legitimacy of a breach of contract because multiple computing devices receive identical copies of the original digital contract. This is known as public blockchain and guarantees that the contract to the letter will be honored. This fintech movement is likely to spread across borders, making smart contracts available to almost everyone.
5. Sustainability and Fintech
The concept of sustainability encompasses all the other topics discussed above. Today, it is critical for fintech companies to have a strategy that prioritizes sustainability and other CSR initiatives.
As a result, there is a growing number of zero-carbon data centers that run on renewable energy or produce their own energy. Fintech companies that refuse to take responsibility for corporate social responsibility will undoubtedly fall behind. All industries, including fintech and other financial services, must adopt greener procedures.
Statistics for the FinTech sector
According to the Boston Consulting Group, annual sales in the financial technology sector will reach $1.5 trillion by 2030. While privat payments led the way in previous eras, the next era is expected to be dominated by B2B payments. There is ample opportunity for B2B fintech companies to make a difference, as SMEs around the world face unmet needs every year.
As a rule, businesses in every field tend to be more about financial services nowadays. The old companies are having difficulty matching the speed of new technology and this is likely to make it even more important to fulfill the rising need for fintech answers.
Lending platforms and neobanks are usual established businesses which create and maintain fintech apps and software for online as well as mobile banking may experience struggles in developed markets. The demand of the market will be for stable and inexpensive solutions because the costly services offered by today’s market chiefs can only push away fresh customers, mainly from developing countries.
Conclusion
From the above, it is clear that fintech will disrupt the financial industry on a number of fronts, including simplifying the use of payment gateways, providing credit and facilitating commercial and personal transactions for people around the world. Fintech will also boost e-commerce, as it will make it much easier to open an account and allow transactions to take place without markups.
As the population grows, fintech will enter uncharted territory. With this in mind, as well as the growing penetration of computers and the internet, in five years’ time, we could see fintech being very different from what it is today.
Photo credits: TestFort