The rise of crypto-currencies and central bank digital currencies (CBDCs), as well as increased usage of artificial intelligence (AI) are among the key trends set to define financial technology, or fintech, in 2024.
This is according to insights bySwiss-based financial advisory organisation deVere Group, which notes fintech is undergoing rapid and transformative changes.
The organisation identifies key trends that are poised to shape the landscape of the booming industry in 2024, with soaring demand for mobile payments, cyber security and global financial inclusion rounding up the top six trends.
deVere Group CEO and founder Nigel Green says: “2024 promises to be a dynamic and innovative period for fintech. We think it’ll go down as a landmark year for the sector.”
Top of the predictions list is the notable continued rise of crypto-currencies in 2024, the firm predicts. “Over the past 12 months Bitcoin, the world’s largest digital asset, has gained 155% in value – this trend can be expected to continue as institutional investors pile in, especially in the form of Bitcoin spot ETFs, bring with them not only capital but expertise and a huge amount of influence and credibility.
“This growing acceptance of crypto-currencies by traditional financial institutions, along with regulatory clarity in many jurisdictions, is likely to contribute to their mainstream adoption. We predict that crypto will play an increasingly important role in diversifying investment portfolios and facilitating cross-border transactions, thereby reshaping the global financial landscape.”
In tandem with the ascent of crypto-currencies, the rise of CBDCs is set to be a defining trend in 2024, reveals the deVere Group.
“Several central banks around the world are actively exploring or developing their own digital currencies, aiming to modernise payment systems and enhance financial inclusion.
“CBDCs offer governments greater control over monetary policy and the ability to streamline financial transactions. Additionally, these digital currencies have the potential to reduce the reliance on cash and improve the efficiency of cross-border payments.
“As more central banks pilot and implement CBDCs, 2024 is expected to mark a crucial turning point in the evolution of digital currencies within the mainstream global financial system.”
In third place is the increased usage of AI by fintech firms, with the advisory firm noting AI as a driving force behind the innovation in fintech.
AI took centre stage in 2023, with a wide range of tools, solutions and industries adopting the technology. The launch of OpenAI’s ChatGPT last November brought to public attention the power of generative AI technology. Since then, Google’s Bard, Microsoft’s Bing AI and Elon Musk's xAI have been launched.
In 2024, deVere Group anticipates a significant increase in AI usage by fintechs.
“Fintech firms are increasingly leveraging AI to enhance customer experiences, streamline operations, and make more informed decisions. From robo-advisors to AI-powered chatbots providing customer support, the integration of AI technologies is reshaping the way financial services are delivered.
“The predictive capabilities of AI also play a vital role in risk management and fraud detection. As financial institutions grapple with the evolving nature of cyber threats, AI algorithms are becoming indispensable tools in identifying and mitigating potential risks.
“In 2024, the synergy between fintech and AI is expected to reach new heights, contributing to greater efficiency and innovation within the industry.”
DeVere Group says there will be soaring demand for mobile payments in 2024.
“The convenience and accessibility of mobile payments have made them increasingly popular, and this trend is set to accelerate in 2024. As smartphones become ubiquitous and digital wallets gain traction, consumers are embracing the simplicity of conducting transactions with just a few taps on their mobile devices.
“Fintech companies are likely to invest further in developing user-friendly mobile payment solutions, fostering a cashless society.
“The ease of mobile payments not only caters to the demands of modern consumers but also offers opportunities for financial inclusion by providing individuals in underserved regions access to digital financial services.”
Turning tocyber security, including biometrics, the organisation notes that as fintech continues to advance, so do the threats associated with cybercrime.
“In response, 2024 is expected to witness an intensified focus on cyber security within the financial industry. Fintech firms will increasingly invest in robust security measures, with a particular emphasis on biometric authentication methods such as fingerprint and facial recognition.
“Biometrics provide an additional layer of security, enhancing user authentication and protecting sensitive financial information. By incorporating advanced biometric technologies, fintech companies aim to bolster the trust of consumers and mitigate the risks associated with identity theft and cyber-attacks, ensuring the integrity of digital financial transactions.”
In terms of the last trend, the organisation predicts an increased emphasis on global financial inclusion.
“Fintech is playing a pivotal role in extending financial services to the unbanked and underbanked populations around the world.
“In 2024, initiatives focused on financial inclusion are expected to gain momentum, with fintech companies leveraging innovative solutions such as mobile banking, microfinance, and blockchain to bridge the gap. By expanding access to financial services, particularly in developing regions, fintech is poised to contribute to poverty reduction and economic empowerment on a global scale.”
The deVere CEO concludes: “The fintech sector is poised for unprecedented growth and innovation. The rise of crypto-currencies and CBDCs, the increased usage of AI, the surge in mobile payments, the heightened focus on cyber security, and the commitment to global financial inclusion collectively paint a picture of a dynamic and transformative year for the financial technology sector.
“The convergence of these trends is not only reshaping the way we conduct financial transactions, but also redefining the very nature of the global financial ecosystem.”