6 fintech predictions for 2024

Use cases for AI in FinTech are emerging fast, transforming how customers interact with their financial service providers. Soon we’ll see language models guide consumers in place of a human asset manager or financial advisor, as AI continues to make personalized money management and investment products more accessible. At the same time, public trust in AI is growing, with a recent survey carried out by US-based payments provider Marqeta finding that 52% of respondents under 50 years old were interested in using generative AI to help manage their finances.

We’ll also see AI being used across middle and back-office functions, due to its ability to analyse vast datasets. Expect to see AI improve the speed and accuracy of risk assessments and transform complex processes like identifying and combatting fraud.

‘Every company will be a FinTech company’. Angela Strange of investment firm Andreesen Horowitz coined the phrase back in 2019, speaking in the sense that future companies will owe a significant portion of their revenue to financial services. In 2024, this vision will get one step closer, as businesses such as e-commerce sites and social media platforms include loans, insurance and payment functionalities as part of their offerings.

By collaborating with FinTech companies that provide these embedded services, non-financial companies can integrate financial services without significant outlay. Embedded insurance is one area we’ll see this happen, with consumers given the choice to acquire coverage when they purchase a product. 

Take up from consumers and businesses for open banking will increase in 2024, as the world shifts from traditional finance to FinTech and fast payments. We’re likely to see a trend where large companies—not just banks—start to embed payment solutions using open banking frameworks, which will call on FinTech firms that specialize in APIs to connect firms to the open banking structure.

The surge in open banking will also cause increased regulatory scrutiny over security controls, particularly in terms of enhanced customer protection, heightened risk, fraud and money laundering tools.

Real-time payments and cross-border payments will continue to expand. Cross-border transactions is an area that’s traditionally not been well served by banks. But as governments and regulators recognize the need for enhanced payments, we’ll see the development of an open banking framework in the UK and Europe. And as payment infrastructure improves, even small businesses will be able to trade internationally.

The same is true in the US. Traditionally, the US has been behind on instant payments, but as more FinTechs use the Federal Reserve’s FedNow the US market will accelerate.

The funding market tightened in 2023, with investors looking for firms which are serious about long-term profits and not just extreme growth—a trend that’s set to continue into 2024.

Mark Vermeersch, Chief Platform Officer at Treasury Prime, stated this could be down to a shift in sentiment, as the global market gradually becomes more stable.

ESG is climbing up the agenda across industries, and FinTech is no different. Consumers are increasingly looking to use firms that set and meet ESG targets, so firms have an opportunity to make ESG a new competitive advantage while doing good for the planet.

As such, it’ll be no surprise if company boards intensify their net-zero pledges, promising to transition away from energy-intensive technology toward more sustainable options.