After a successful year, the fintech sector is preparing for a 2024 full of innovation. Here are the 5 most important trends to keep an eye on in the coming year.
For the fintech sector, 2023 was an important year. The introduction of various innovations thanks to artificial intelligence and machine learning, for example, has opened up spaces that were unexplored until recently. Many, especially entrepreneurs, have started to take an interest in the market.
The sector, however, has not always had an easy life. Some companies, including Binance and FTX, have gone bankrupt or gone through deep crises, consequently leading many investors to become discouraged and give up risk.
Apart from a few complex moments, it is possible to say that 2023 was a positive year for fintech, with many interesting innovations for the sector. Some of these were predicted in the list of fintech trends in 2023.
With the arrival of the new year, we decided to try again and imagine what the main trends in the fintech sector in 2024 could be. After identifying them, we chose 5 among the most interesting ones, here are what they are.
1) Artificial intelligence
It is impossible not to start from artificial intelligence, a major protagonist already in 2023 thanks to its versatility. In 2024 this technology will certainly continue to be exploited even more, as it evolves and renews itself with great speed, giving rise to new opportunities.
According to the English consultancy firm Juniper research, thanks to generative artificial intelligence, in 2024 we could see the smartest banks offering even more personalized and up-to-date services to their customers, thus also improving their customer experience.
Furthermore, since the emergence of new payment methods is increasingly frequent, artificial intelligence can be used to develop innovative AML and KYC procedures and thus monitor compliance with the rules.
Given the versatility of this technology, however, it is very likely that new ways of using it will be discovered over the years and subsequently applied, but it will be necessary to wait to find out about them.
2) Buy Now Pay Later for the B2B segment
2024 could also be the year of BNPL for companies operating in the B2B sector. What does all this mean? Companies that offer a Buy Now Pay Later service could begin to extend their payment services, generally reserved for customers in the consumer segment, and also to companies that trade between Them.
This likely happens because businesses, especially SMEs, increasingly need liquidity to meet their most pressing needs. The ones that can establish themselves on the market could therefore be those that can adapt more quickly and effectively to the needs of customers, who are increasingly numerous in this segment.
3) A2A Payments
A2A payments, also known as Account-To-Account or Account-based, are based on the transfer of money directly from one bank account to another, without any type of intermediation.
Their success, according to Juniper Research, will be possible thanks to open banking, the reduction of management costs, the greater speed of execution, and the lower risk of fraud which is also faced thanks to SCA (Strong Customer Authentication).
This type of payment is also more sustainable from an environmental point of view since to use it you only need a bank account and an electronic device (smartphone, tablet, PC) and does not require credit or debit cards.
4) Central Bank Digital Currencies (CBDC)
During 2023 there was a lot of talk about CBDCs, i.e. the digital versions of fiat currencies managed directly by central banks.
Some countries have already adopted them this year, for example Nigeria has adopted the eNaira, while in other cases, such as that of the Eurozone, studies are still being conducted in this regard.
If in the EU it is estimated that the digital Euro will not arrive before 2026, there are many other countries, such as China, where the digital currency, the Chinese yuan, already represents a means of very popular payment. What is more likely is that gradually, more and more states will begin to introduce this innovation, thus helping to increasingly normalize their use throughout the world.
5) Biometric payments
Finally, according to Juniper Research, 2024 could be the year of biometric payments. The most important player to have successfully launched into this sector, for the moment, is Amazon, which created One, a method that allows you to pay in stores that have it using the palm of your hand.
To use this method (currently only available in the USA) you need to register and follow a specific process, which connects the palm of your hand (or both) with a credit card. Once this is done, simply go to the payment point and place your hand on the scanner which, once recognized, will accept the transaction.
This payment method is highly appreciated because it improves the customer experience since it significantly shortens waiting times for the customer.
Although biometric recognition still raises many concerns among many people, it is very likely that companies, especially big tech, will try to enter this market in 2024 and take a slice of it, making it a trend.
Original article published on Money.it Italy 2023-12-13 17:06:00. Original title: Fintech: ecco i 5 trend per il 2024
