My 6 predictions for fintech in 2024
We’ve seen some major changes within the fintech space in 2023. As we look ahead to the new year, I believe several key trends will shape the landscape of this thriving industry throughout 2024. Making 2024 a landmark year for the sector. Let’s look at my six predictions for fintech in 2024, as quoted by Financial Mirror, Bitcoin Insider, Tech Channel News, Small Business Connections, and My Startup World, amongst other media.
First, the ongoing rise of crypto.
Over the past year, Bitcoin – the world’s largest crypto by market cap – has risen 155% in value. As more institutional investors pile in, this trend will likely continue. Particularly in spot Bitcoin ETFs (exchange-traded funds), bringing with them capital and expertise but also massive influence and credibility.
The growing acceptance of crypto by traditional financial institutions and increasing regulatory clarity in numerous jurisdictions will likely fuel their mainstream adoption. We believe crypto will play an ever-more important role in diversifying investment portfolios. This along with facilitating cross-border transactions, therefore reshaping the global financial landscape.
Second, the rise of Central Bank Digital Currencies (CBDCs).
Along with crypto’s ascent, the rise of CBDCs will likely be a defining trend next year. Central banks across the globe are actively exploring or developing their own digital currencies. This to modernise payment systems and boost financial inclusion.
Central Bank Digital Currencies provide governments with more control over monetary policy and the ability to streamline financial transactions. Furthermore, CBDCs can reduce the reliance on cash and bolster the efficiency of cross-border payments.
As such, as more central banks pilot and launch CBDCs, next year could be a key turning point in the evolution of digital currencies within the mainstream global financial system.
Third, fintech firms increase use of AI.
Artificial intelligence (AI) is a driving force behind fintech innovation, and a considerable surge in AI usage is forecasted for 2024.
More and more fintech companies are using AI to improve the customer experience, ease operations, and make more informed decisions. AI technologies, from robo-advisors to AI-powered chatbots offering customer support, redefine how financial services are delivered.
In addition, AI plays a crucial role in risk management and fraud detection thanks to its predictive capabilities. As cyber threats evolve, AI algorithms are becoming imperative tools in detecting and mitigating potential risks.
The fintech and AI interaction will reach new heights in 2024. This will lead to greater efficiency and innovation within the industry.
Fourth, heightened demand for mobile payments.
The accessibility and convenience of mobile payments have made them more popular than ever. A trend that is set to gain pace in 2024. As smartphones become increasingly ubiquitous and digital wallets gain traction, consumers are accustomed to the ease of transactions with a few simple taps on their mobile devices.
Consequently, fintech firms will likely invest further in developing user-friendly mobile payment solutions, encouraging a cashless society.
The ease of mobile payments not only caters to modern consumers’ demand. It also provides opportunities for financial inclusion by offering access to digital financial services for those in underserved areas.
Fifth, cybersecurity and biometrics
As fintech advances, so do threats linked to cybercrime. In answer to this, we can expect to see a greater focus on cybersecurity within the financial industry next year.
Fintech companies will invest more in tough security measures, especially biometric authentication methods such as fingerprint and facial recognition.
Indeed, biometrics offer an extra layer of protection, boosting user authentication and protecting sensitive financial information. With the incorporation of advanced biometric technologies, fintech firms aim to increase consumer trust and reduce risks associated with identity theft and cyber-attacks. This will result in a boost in reliability of digital financial transactions.
Sixth, global financial inclusion.
A central point within 2024’s fintech predictions is the heightened emphasis on global financial inclusion. Fintech is playing a vital role in offering financial services to the unbanked and underbanked populations across the world.
Financial inclusion initiatives will gain momentum next year. Fintech firms will focus on innovative solutions such as mobile banking, microfinance, and blockchain to bridge the gap. Therefore, by increasing access to financial services, especially in developing countries, fintech can contribute to reducing poverty and fuelling economic empowerment worldwide.
We can expect to see unparalleled growth and innovation in the fintech sector in 2024 with the rise of crypto and CBDCs, enhanced usage of AI, a surge in mobile payments, increased focus on cybersecurity, and the commitment to global financial inclusion.
The convergence of these trends is reshaping how financial transactions are undertaken. Not only that but it’s redefining the nature of the global financial ecosystem.
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