Pulling back the curtain and unveiling the future of fintech in 2024

The Christmas trees have come down, and the industry is getting its feet back under the table and thinking about what 2024 will bring. 

I’m very excited about this year because I think the future of finance will be fully unveiled. I’ve been lucky enough to work at the forefront of the fintech revolution; a sector where innovation isn’t just a buzzword – it’s the very currency of our realm. And I think this year will be a special one.

There are four burgeoning trends in particular that I think will redefine the financial ecosystem in 2024.

Gen AI: The driver behind fintech’s evolution

Generative AI, or Gen AI as it’s colloquially known, is a type of artificial intelligence technology that produces various types of content, including text, imagery, and synthetic data.

The financial services industry has big plans for applications of natural language processing, such as ChatGPT and the new wave of large language models that are teaching computers to read and derive meaning from language. BlackRock, for example, has already started rolling out its first Gen AI tools to its clients and other companies will follow suit as they seek to leverage Gen AI to reduce the burden of administrative tasks and boost productivity – and the bottom line.

The role of Gen AI will expand exponentially in 2024. It will no longer be merely a sharp strategic edge; it’s set to become the central system of fintech operations.

Its capability to learn, reason, and comprehend at a granular level will be critical in areas such as compliance checks, assisting sales agents with questions, training agents to close more deals, selecting the right leads for targeting and marketing, and getting one step closer to real-time decision-making for underwriting and affordability checking.

By the end of 2024, I expect Gen AI to underpin a new wave of fintech solutions, offering hyper-personalised services on a scale that was previously unimaginable.

Embedded finance: The invisible thread of commerce

Embedded finance has steadily woven its way into the fabric of daily transactions, and its continued expansion is set to continue unabated. Analysts have projected that the embedded finance market will reach $1.9 trillion by 2028 as global adoption continues to surge.

This year, embedded finance will become an integral thread in the tapestry of commerce. Embedded finance is presenting businesses with a number of compelling possibilities – they can obtain and retain customers in different ways, scale faster, and reimagine and redesign how their products and services are deployed.

Purchasing a vehicle, investing in equipment, or upgrading technology will all come with financial solutions woven into the purchase journey itself, eradicating the need for separate banking interactions.

Thinking about the SME sector specifically, embedded finance has already been a game changer. Small companies have traditionally struggled to access the financial services that meet their unique needs, but embedded finance bridges the gap to provide them with greater access to products and services directly within their existing tools and platforms. And as SMEs continue to struggle with cashflow and access to mainstream business loans, embedded finance is also providing them with timely alternative funding sources that enable them to bypass the banks.

Consumer preferences: Ecosystems will move ahead of institutions

A pivotal shift is now well underway in finance, with consumer preferences moving from traditional banking institutions to integrated financial services that are seamlessly embedded within their preferred marketplaces and ecosystems, whether that’s an Amazon, a Facebook, or an Uber.

In 2024, this shift will start to dominate consumer and small business owners’ behaviour, and they will be increasingly looking for financial solutions that align with their individual lifestyles and consumption habits. Platforms that can effectively offer financial products within these ecosystems will establish the new standard for engaging with finance – and emerge victorious.

In a future where ecosystems will thrive, traditional banks need to look past their products and services and instead focus on the changing needs of their customers. We will see more banks looking to unlock the value of agile partners, such as the fintechs and tech players who can do things better than they can, to help them reconnect with their consumer base.

Frictionless finance: The next generation 

We’ve recently spearheaded a pioneering ‘4-click’ embedded business finance journey that exemplifies our continuing commitment to innovation. This industry-leading approach seamlessly integrates funding into the purchasing process, allowing business owners to access pre-approved, frictionless finance effortlessly.

It eliminates the need for explicit finance applications, enabling businesses to secure funding as a natural part of their existing purchasing journey. We’re helping to shape a frictionless future, where business owners spend less time navigating financial complexities and more time growing their enterprises.

In summary, the financial ecosystem of 2024 will be characterised by its dynamism, its seamless integration, and its invisible efficiency. Industry participants will need to innovate with intention, anticipate the evolving needs of customers, and adapt to the ever-changing landscape, ensuring that they’re not just offering products but enabling progress.