The Pay Later Market is Growing
Pay-later companies will be able to move forward more confidently and on the flip-side, customers will gain a lot more confidence in small credit. In 2024, pay-later fintech companies will be able to offer credit to underserved customers more effectively and at scale. This will help the category to enter the mainstream and be seen as a viable alternative by the masses.
As more merchants adopt cashless payment systems, consumers will be able to track their spending in real-time, giving them more control over their finances. Furthermore, businesses will benefit from faster transactions, lower transaction costs and decreased risk of fraud.
Cyber Security and Fraud Prevention
As financial institutions become more reliant on technology, cybersecurity and fraud prevention will become even more critical. In 2024, we can expect to see a lot more fintech companies invest in cybersecurity measures to protect their customers, data, and reputation.
Using artificial intelligence and machine learning, fintech companies will be able to identify fraudulent activities and repeated defaulters a lot more successfully. Today, these functions are backed with underwriting models that prevent an increase of automatically approved defaulting customers.
Fraud prevention is an important aspect of cybersecurity hence financial institutions will use advanced algorithms and machine learning to not just detect fraudulent activity but also prevent losses. This includes monitoring account activity, flagging suspicious transactions, and implementing real-time fraud detection systems.
Open Banking and API Integration
Open banking is a growing trend that allows third-party service providers to access customer data through open application programming interfaces, also called APIs. It can create a more competitive marketplace, drive innovation, and increase transparency.
By sharing customer data with third-party providers, financial institutions can offer more personalised services and better products. Customers can also benefit from a more seamless banking experience, as they can access multiple financial services through a single platform.
In 2024, we can expect to see more financial institutions embracing open banking and API integration to improve their customer offerings. This can include integrating payment services, investment platforms, and budgeting tools into a single platform.
Rise of AI in Fintech
Expert financial advisers agree that AI technology will revolutionise financial planning by 2024. AI-powered software can analyse vast amounts of financial data and create personalised investment strategies based on an individual’s preferences and risk tolerance. This is possible through sentiment analysis.
Chatbots will possibly be able to identify customer issues and solve them using local languages and dialects even. AI-powered chatbots can also act as virtual financial advisers, offering guidance and support that may not have been available to younger generations in previous years.
It’s predicted that AI will take over some of the tasks traditionally handled by human financial advisers, allowing for greater efficiency, speed and accuracy in managing finances.
The Return of DeFi and Blockchain
As the DeFi ecosystem continues to grow, we can expect to see a wider range of innovations emerge. Looking to the future, we can expect to see continued growth and innovation in the decentralised finance and blockchain ecosystem. As more entrepreneurs and businesses explore the possibilities of these technologies, we may see the creation of new economic models that challenge traditional notions of finance and commerce.
Ultimately, the success of decentralised finance and blockchain will depend on a variety of factors, including regulatory clarity, technological innovation, and user adoption.
Embedded Finance is Going to See a Boost
Embedded finance allows customers to enjoy banking-related services from non-banking businesses without disrupting their customer experience and journey.
Some examples of embedded finance include when customers are able to subscribe to an online course and make a payment within the course website itself or when customers take a cab ride and pay for it inside the service provider’s app.
By 2025, embedded finance is estimated to hold a value of $141 billion, driven by demand from traditional companies such as vehicle manufacturers and hotels. In 2024, more than 70% of financial services & fintechs are expected to build embedded finance products and services.
Credit Scoring will Become More Accurate
Be it institutions, entrepreneurs, or regulatory bodies, everyone is seeking quicker and more effective methods to analyse customers’ financial and credit profiles, prevent fraud and automate credit approval. Innovations like using customers’ online activities to predict credit behaviour and AI-driven credit scoring will become very helpful tools to help streamline this process and make it more cost-effective.
Neobanking will Become Hyper-Focused
In 2024, neobanks will use their deep understanding of customers & their access to data to develop hyper-focused products and services that cater to different segments such as new-to-credit customers, students, retirees, salaried women, & more.
To conclude, while volatile geopolitics and an economic recession have made things difficult, the Fintech ecosystem is looking very bright. The fintech industry is continuously evolving, driven by advances in technology and changes in consumer behaviour. 2024 will witness significant trends in AI and machine learning, blockchain, digital banking and mobile payments, cybersecurity and fraud prevention, and open banking and API integration.
These trends have the potential to transform the financial industry and provide more personalised, convenient, and secure services to customers. 2024 is shaping up to be a watershed year for the way digital banking and finance evolve in the country and around the world.
Pay-later companies will be able to move forward more confidently and on the flip-side, customers will gain a lot more confidence in small credit. In 2024, pay-later fintech companies will be able to offer credit to underserved customers more effectively and at scale. This will help the category to enter the mainstream and be seen as a viable alternative by the masses.
As more merchants adopt cashless payment systems, consumers will be able to track their spending in real-time, giving them more control over their finances. Furthermore, businesses will benefit from faster transactions, lower transaction costs and decreased risk of fraud.
Cyber Security and Fraud Prevention
As financial institutions become more reliant on technology, cybersecurity and fraud prevention will become even more critical. In 2024, we can expect to see a lot more fintech companies invest in cybersecurity measures to protect their customers, data, and reputation.
Using artificial intelligence and machine learning, fintech companies will be able to identify fraudulent activities and repeated defaulters a lot more successfully. Today, these functions are backed with underwriting models that prevent an increase of automatically approved defaulting customers.
Fraud prevention is an important aspect of cybersecurity hence financial institutions will use advanced algorithms and machine learning to not just detect fraudulent activity but also prevent losses. This includes monitoring account activity, flagging suspicious transactions, and implementing real-time fraud detection systems.
Open Banking and API Integration
Open banking is a growing trend that allows third-party service providers to access customer data through open application programming interfaces, also called APIs. It can create a more competitive marketplace, drive innovation, and increase transparency.
By sharing customer data with third-party providers, financial institutions can offer more personalised services and better products. Customers can also benefit from a more seamless banking experience, as they can access multiple financial services through a single platform.
In 2024, we can expect to see more financial institutions embracing open banking and API integration to improve their customer offerings. This can include integrating payment services, investment platforms, and budgeting tools into a single platform.
Rise of AI in Fintech
Expert financial advisers agree that AI technology will revolutionise financial planning by 2024. AI-powered software can analyse vast amounts of financial data and create personalised investment strategies based on an individual’s preferences and risk tolerance. This is possible through sentiment analysis.
Chatbots will possibly be able to identify customer issues and solve them using local languages and dialects even. AI-powered chatbots can also act as virtual financial advisers, offering guidance and support that may not have been available to younger generations in previous years.
It’s predicted that AI will take over some of the tasks traditionally handled by human financial advisers, allowing for greater efficiency, speed and accuracy in managing finances.
The Return of DeFi and Blockchain
As the DeFi ecosystem continues to grow, we can expect to see a wider range of innovations emerge. Looking to the future, we can expect to see continued growth and innovation in the decentralised finance and blockchain ecosystem. As more entrepreneurs and businesses explore the possibilities of these technologies, we may see the creation of new economic models that challenge traditional notions of finance and commerce.
Ultimately, the success of decentralised finance and blockchain will depend on a variety of factors, including regulatory clarity, technological innovation, and user adoption.
Embedded Finance is Going to See a Boost
Embedded finance allows customers to enjoy banking-related services from non-banking businesses without disrupting their customer experience and journey.
Some examples of embedded finance include when customers are able to subscribe to an online course and make a payment within the course website itself or when customers take a cab ride and pay for it inside the service provider’s app.
By 2025, embedded finance is estimated to hold a value of $141 billion, driven by demand from traditional companies such as vehicle manufacturers and hotels. In 2024, more than 70% of financial services & fintechs are expected to build embedded finance products and services.
Credit Scoring will Become More Accurate
Be it institutions, entrepreneurs, or regulatory bodies, everyone is seeking quicker and more effective methods to analyse customers’ financial and credit profiles, prevent fraud and automate credit approval. Innovations like using customers’ online activities to predict credit behaviour and AI-driven credit scoring will become very helpful tools to help streamline this process and make it more cost-effective.
Neobanking will Become Hyper-Focused
In 2024, neobanks will use their deep understanding of customers & their access to data to develop hyper-focused products and services that cater to different segments such as new-to-credit customers, students, retirees, salaried women, & more.
To conclude, while volatile geopolitics and an economic recession have made things difficult, the Fintech ecosystem is looking very bright. The fintech industry is continuously evolving, driven by advances in technology and changes in consumer behaviour. 2024 will witness significant trends in AI and machine learning, blockchain, digital banking and mobile payments, cybersecurity and fraud prevention, and open banking and API integration.
These trends have the potential to transform the financial industry and provide more personalised, convenient, and secure services to customers. 2024 is shaping up to be a watershed year for the way digital banking and finance evolve in the country and around the world.