As we move forth into 2024, let’s take a look at some of the fintech trends to watch out for this year, and what impact these trends could potentially have on businesses and consumers alike.
Artificial Intelligence (AI)
AI is quite the buzzword at the moment, with numerous applications throughout many different sectors – and fintech is no different. During the 2023 Birmingham Tech Week, BNP Paribas Personal Finance UK hosted a Connector Series event at iCentrum Birmingham Innovation Campus, shining light on the use of AI within the fintech industry.
The consultants highlighted how AI can be used for data visualisation, chatbots, and automatic underwriting, which can be applied in the areas of risk, marketing, customer experience, corporate, commercial, operations, and IT.
With this in mind, AI could have the potential to improve many online experiences, from anything like online banking to online casinos. For example, when users play casino online they could benefit from personalised customer experiences, real time customer support, and improved cybersecurity. In addition, AI could be leveraged for market analysis to improve the functionality and offerings of the platform, and smooth kinks in the software before they become a larger issue.
Blockchain integration provides businesses with a fixed record of transactions, allowing them to track user data and the people who access the data. In turn, this improves the transparency and ease of sharing of information within a business’ network. The technology utilises public-key cryptography to create digital signatures, which ensures that access to the data is secure.
More and more fintech names are turning to blockchain to disrupt and/or improve upon the financial industry. By integrating this technology, it has the potential to improve processes, products, and systems, as well as foster more trust with stakeholders thanks to the enhanced security and transparency.
It is thought that one of the key industries that could be impacted by blockchain integration is the property market. Blockchain integration could streamline the buying and selling of properties thanks to its ability to automate complicated transactions whilst also following preset rules, known as smart contracts. Further to this, it could also digitise the process by turning properties into tradeable tokens, thus boosting the liquidity of assets and the flexibility of house buying.
Open finance is essentially the provision of financial services by accessing customer data held by other institutions as a third party. This allows third-party providers to access payment accounts and payment transactions pertaining to specific customers. Since its introduction, it has sparked more innovation within banks and fintechs alike to provide new services and create updated business models.
In 2023, the European Commission proposed more regulation on open finance by publishing a framework for accessing financial data and guidelines for payment services, which made up the draft of the Open Payments Act.
This suggests that open finance will continue to grow into 2024, as the process will become increasingly regulated and standardised. Due to this, there will likely be a rise in innovations for application programming interfaces (APIs), particularly in banking, which will reduce the risk of technical issues when third-party providers attempt to access the information they require.
Overall, fintech looks to continue with growth and innovation in 2024, particularly when it comes to streamlining processes, automating transactions, boosting security, and improving overall customer experience.