It’s incredibly interesting to watch how the financial industry is changing. Over the past decade, there have been so many fintech industry trends and technological breakthroughs that have influenced our habits, given us more opportunities, and raised fintech to a new peak. Based on the latest research and personal observations, we have prepared for you a detailed article on the blockchain fintech trends in 2024.
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Table of Contents:
Top 5 Promised Fintech Trends for 2024
In the dynamically changing pool of financial technology trends, the year 2024 holds a wave of transformative advancements that promise to redefine traditional financial paradigms. And blockchain and web3 technologies lie at the forefont of this evolutionary steps, poised to revolutionize the very foundations of the financial sector.
Since fintech uses many online technologies that are designed to speed up the processes of interaction with clients and making payments, the importance of data confidentiality is growing. A new approach to financial management requires new laws. The first Payment Service Directive laid the foundation for the rapid development of the fintech industry in Europe back in 2007. It also laid the legal foundation for SEPA (Single Euro Payments Area).
Since then, legislation related to fintech has been constantly evolving and shaping the market along with the new trends and applications araising almost every month. The main thing to follow in common for all, is that the “new” apps in fintech industry strive to increase its value for customers in order to compete with traditional institutions. Realizing all these difficulties, financial market players continue to improve the quality of their services and offer new solutions based on the latest fintech technology types.
Therefore, if we delve deeper into the current promising fintech trends, we can see that most of them are driven by the web3 technologies, such as blockchain and AI. Let’s discuss them all in more detail!
1. Central Bank Digital Currencies (CBDCs)
Central Bank Digital Currencies (CBDCs) represent a digital form of fiat currency issued and regulated by a country’s central bank. Unlike cryptocurrencies such as Bitcoin, CBDCs are centralized and backed by the full faith and credit of the issuing government. The concept of CBDCs has garnered great attention in recent years due to their potential to revolutionize the global financial system and significant steps forward its implementation using blockchain as a foundation for it.
By leveraging blockchain or DLT technologies, CBDCs offer a secure, transparent, and efficient means of conducting monetary transactions. Moreover, CBDCs hold the promise of financial inclusion, enabling greater access to banking services for underserved populations while minimizing transaction costs and enhancing cross-border payments and therefore is one of the most discussed trends in fintech.
According to the latest reserach made by the Atlantic Council’s Central Bank Digital Currency tracker, 130 countries, representing 98% of the world’s GDP, are already conducting CBDC research. Numerous countries, including China, Sweden, and the Bahamas, have either launched pilot programs or initiated research into CBDCs.
Such efforts reflect central banks’ interest in staying in the forefront of technological innovations and address evolving consumer demands for digital payment solutions. Additionally, the rise of private cryptocurrencies and stablecoins has spurred central banks to explore CBDCs as a means of maintaining monetary sovereignty and mitigating potential risks posed by alternative digital currencies.
2. Decentralized Finance (DeFi)
We all know that decentralized finance market has been representing a paradigm shift in the traditional financial landscape since a decade. Yet, according to the numerous researches and following the current crypto market state we can predict a huge demand for DeFi apps and any other innovative solutions in this field for the 2024 making this emerging technology in fintech a complete trend once again.
To give a short overview for the newbies, unlike traditional finance, which relies on intermediaries such as banks and brokerage firms, DeFi operates on public blockchains, enabling peer-to-peer transactions without the need for trusted third parties. Smart contracts, self-executing code deployed on blockchains, automate various financial functions, including lending, borrowing, trading, and asset management, thereby eliminating the need for intermediaries and reducing associated costs.
By removing barriers to entry and enabling borderless transactions, DeFi empowers individuals who are underserved or excluded by traditional banking systems to access a wide range of financial opportunities. Also, the newest approaches such as account abstraction or the concepts of restaking making DeFi even more accessible for non-tech users while allowing for additional income generation for users’ savings.
Additionally, ReFi, or Regenerative Finance, represents an evolution of DeFi that focuses on addressing scalability, interoperability, and sustainability challenges to further enhance the efficiency and “greenest” of decentralized finance solutions.
As DeFi continues to evolve and mature, its transformative potential to reshape the financial landscape and empower individuals worldwide becomes increasingly evident, thereby unlocking liquidity and providing opportunities for yield generation in a permissionless manner for a great amount of individuals.
3. Artificial Intelligence and Machine Learning
The use of AI-based technologies in finance has already become more than just one among others finicial technology trends, and we have a strong understanding the technology is here to stay.
Today advanced artificial intelligence algorithms can automatically determine if a client matches a particular segment and launch a chain of the most appropriate actions. Using a set of preprogrammed criteria, artificial intelligence improves the efficiency of daily operations and the quality of the user experience. The “trend” has surely developed a place for itself and projected to grow even more in the coming years.
The global AI in fintech market size was evaluated by ZION Market Research at $12.12 billion in 2022 and is slated to hit $42.17 billion by the end of 2030 with a CAGR of nearly 17% between 2024 and 2030.
Artificial intelligence minimizes the likelihood of human error, which is why more and more companies are focusing on process automation. Also, AI processes information much faster and is able to provide instant solutions, which ultimately helps to reduce the costs and risks. Artificial intelligence is one of the top fintech trends in 2024, especially when it comes to neobanks, where user experience comes first.
4. WellTech as one of top fintech trends in 2024
Welltech, or wellness technology, refers to the utilization of technology to enhance various aspects of individual well-being, including physical, mental, and financial health. In the field of financial technology market, welltech plays a crucial role in promoting financial wellness by providing individuals with tools, resources, and personalized solutions to manage their finances effectively.
The recent researches shows that $2.2 billion in investments in welltech startups followed by a growing $4.2 trillion wellness business with a desire to merge it with the AI technologies.
The intersection of technology and financial wellness will gain more traction. Services like robo-advisory will democratise investment opportunities, contributing to a more inclusive financial environment.
Herman Stogniiev, CTO and Co-founder of IdeaSoft
One significant application of welltech in fintech involves the integration of artificial intelligence to deliver personalized financial advice and services. AI-powered robo-advisors, for instance, leverage algorithms to analyze individuals’ financial situations, goals, and risk preferences, thereby offering tailored investment recommendations and portfolio management strategies. This democratization of investment opportunities not only empowers individuals to make informed financial decisions but also contributes to a more inclusive financial environment by breaking down barriers to entry and expanding access to wealth-building tools and services.
The potential impact of welltech on investment strategies and algorithmic trading is profound, as it enables the development of more sophisticated and adaptive financial solutions. Overall, the combination of welltech and AI in represents a transformative force that has the potential to revolutionize how individuals manage their finances, invest, and plan for the future, and therefore, this tech innivation surely deserve to be among our list of new trends in fintech.
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5. Enhanced Security & Authentication Measures
The financial sector faces an escalating threat landscape characterized by increasingly sophisticated cyber attacks and data breaches. Cybercriminals continuously evolve their tactics, leveraging advanced techniques such as phishing, malware, and ransomware to target financial institutions and their customers. Cybersecurity Ventures predicts cybercrimes to cost the world $9.5 trillion USD in 2024.
These threats pose significant risks to the integrity of financial data, the confidentiality of sensitive information. As the volume and complexity of cyber threats continue to rise, it becomes necessary for financial organizations to implement robust security measures to safeguard against potential breaches and protect the interests of their stakeholders. Thus, we call for cybersecurity and enhanced user authentification measures to be among the new market trends and even blockchain trends in fintech. Now we will examine why.
Web3 technologies, such as blockchain, play a pivotal role in enhancing financial security by offering innovative solutions for authentication and identity management. Blockchain-based digital identity solutions offer a decentralized and tamper-resistant mechanism for managing and verifying individuals’ identities across different financial services and platforms. By leveraging the immutability and transparency of blockchain technology, financial institutions can enhance trust, reduce fraud, and streamline identity verification processes, thereby strengthening overall financial security in an increasingly digitized and interconnected world.
Fintech Market Forecast 2024
Reflecting on a decade of fintech innovation, it’s evident that startups have disrupted certain segments of the financial services industry, particularly in areas like software-based payments, buy now pay later (BNPL), and commission-free trading. Companies such as Stripe, Affirm, and Robinhood have significantly altered business models and customer expectations. However, incumbents have also adapted, embracing innovations like mobile banking and consumer-permissioned API access to financial data, leading to widespread industry adoption.
In certain sectors, incumbents have proactively embraced innovation, gaining a stronghold in the market. For instance, while robo-advisors were pioneered by startups like Betterment and Wealthfront, incumbents now dominate 80 percent of the market.
Heading into 2024, we see the fintech market in the midst of a rebound.
F-Prime Capital, 2024 Fintech Market State Research
Despite these shifts, the fintech landscape continues to evolve, with ongoing developments in areas such as cryptocurrency, real-time payments, and AI-driven financial services, shaping the industry’s trajectory heading into 2024. Investors are increasingly prioritizing profitable and sustainable growth, leading to a rebound in public valuations and multiples within the fintech sector.
Which Fintech Trends Are No Longer Trends?
Several fintech trends that were once considered innovative or even disruptive have evolved to become standard practices or have faded away over time. A few of these trends include:
- Mobile banking: Once a trend that disrupted traditional banking, mobile banking now has become a standard practice. Virtually all banks and financial institutions offer mobile apps, providing customers with convenient access to their accounts, transactions, and financial management tools. Mobile banking has transitioned from a trend to an essential component of modern banking services.
- Big data: While big data analytics revolutionized financial services by enabling institutions to analyze vast amounts of data for insights and decision-making, it is no longer considered as a trend itself. Instead, big data has become an integral part of financial operations, used for risk management, fraud detection, customer segmentation, and personalized financial services. As such, it has transcended its status as a mere trends in fintech to become a foundational technology in the financial landscape.
- Wealth management: Wealth management, once considered a niche area,today has expanded to a broader range of services and technologies. While robo-advisors and digital wealth management platforms were once viewed as disruptive trends, they have now become mainstream offerings. Wealth management has evolved beyond being a trend to become a fundamental aspect of financial planning and investment strategies for individuals and institutions alike.
Even though, these trends may no longer be as novel or buzzworthy as they were once, they have contributed to shaping the fintech market and paved the way for new innovations and advancements in the industry.
How IdeaSoft Develops Modern Fintech Solutions
IdeaSoft is a leading full-cycle software development company specializing in creating innovative fintech solutions. With a dedicated business team, extensive expertise, and robust research and fintech development capabilities, our team has been delivering outstanding products and leveraging emerging technologies to drive better business outcomes since 2016.
With a global presence, including offices in Lisbon, Warsaw, Prague, New York, Toronto, and Dubai, IdeaSoft is well-equipped to serve clients worldwide. As a member of Sigma Software Group since 2021, IdeaSoft is committed to deliver excellent solutions to both emegring startups and well-established corporations.
We have a solid track record of successfully delivered fintech solutions, you can check the most prominent of them in our portfolio of fintech case studies. For more examples or more detailed description of each, you can reach out to our tech specialist and request a presentation.
For businesses looking to explore innovative fintech solutions tailored to their specific needs, IdeaSoft offers personalized workshops available both online and on-site in one of our offices to discuss requirements, objectives, and potential opportunities.
Summary
The financial market is changing, it is a fact. The industry is inextricably linked to online and technical progress, therefore it uses the latest technologies such as blockchain and AI to create more profitable financial solutions. Security is still the main risk area for financial companies, so the development of security strategies is firmly entrenched in the ranks of the top fintech trends in 2024. Another emerging trend is the rise of SocialFi, which combines social media with decentralized finance to offer innovative financial products and community-driven platforms. Anyway, current researches show that the industry continues to develop and we should expect a bunch of new fintech apps and AI-driven tools integration in the near future.
