The 21st century so far has been defined by tech, and by the swiftness with which new technological innovations are changing the world around us. In the past two generations, fintech has graduated from niche bank management software to global industry, and one which the UK has dominated.
Fintech is a ripe field for investment and for entrepreneurialism, but is just as prone to trends as any other. As such, shrewd decisions should only be made after understanding what will come to define fintech in the coming year. With this in mind, what are the key trends that are set to emerge within the fintech industry in 2024, and how might they manifest?
The Rise of ‘Regtech
‘Regtech’ is an emerging sub-field within tech, referring to tech tools and platforms designed to assist with or otherwise manage regulatory compliance. With regard to the fintech industry in particular, regtech is a promising new field which could revolutionise business growth and interaction.
Regulatory compliance is a key consideration for all businesses, from health and safety viewpoints to data handling and, of course, financial concerns. Regtech, emboldened by significant advances in cloud computing and data processing capabilities, allows businesses to more effectively monitor payments and processes to ensure compliance on all sides. The promise of regtech is reduced man-hours in combing through financial records and information, allowing businesses to focus on growth.
Machine Learning and AI
The major success story for the tech industry in 2023 has been AI, and the successful roll-out of public-facing AI tools such as Chat GPT. Businesses have been racing to implement AI technology, partially to benefit from the profound potential it grants with regard to efficiency, and partially due to the significant levels of PR buzz around the field.
In fintech, then, we can expect to observe an increase of funding levied towards machine learning algorithms and AI products or services – to take advantage of uniquely high interest, and to facilitate innovation in a number of key areas. Retail trading platforms could involve AI tools to provide nuanced assistance to novice traders, while accounting software could be revamped as a ‘smart’ platform for managing finances.
Finally, embedded finance is set to be a major trend in the coming financial year, as the possibilities set forth by alternative and digital banking solutions finally shine through into other aspects of the digital commerce experience.
Embedded finance describes the inclusion or offering of financial services and products as part of an otherwise non-financial digital experience or chain; a customer can access and avail of financial concepts without leaving a specific journey. Embedded finance has already been a regular fixture in consumers’ lives, but 2024 will see a fresh explosion in seamless integration of financial products and digital experiences.