Do you wait for a world where your financial transactions are seamless, personalized, and securely managed with just a tap of your finger? In 2024, this reality is not just a distant dream but a tangible evolution propelled by the unstoppable force of FinTech innovation.

Did you know that by the end of 2023, the worldwide FinTech market surpassed a valuation of $226 billion? Moreover, projections indicate that from 2024 to 2032, the market will experience an annual growth rate of 16.8%, culminating in a valuation surpassing $917 billion.

As we’ve embarked on the journey through 2024, the FinTech industry stands as a hotbed of groundbreaking technologies poised to redefine how we interact with money and financial services. Join us as we dive into the top 7 FinTech trends driving this revolution, each confirmed by numbers (because what else can speak louder?), promising to change the future of finance and unlock new possibilities for businesses and consumers alike. Let’s start!

Cybersecurity

Cybersecurity has taken center stage due to the increasing sophistication of cyber threats and the critical importance of safeguarding sensitive financial data in the FinTech sector. As AI and blockchain technologies continue to evolve FinTech operations, the risks associated with cyber attacks, including adversarial manipulation and data breaches, have become more pronounced. Moreover, the interconnected nature of FinTech ecosystems, characterized by extensive 3-party integrations and cloud-based infrastructure, amplifies the surface area for potential security vulnerabilities.

Against this backdrop, executives and technical experts recognize the importance of prioritizing cybersecurity initiatives to protect against emerging threats, ensure regulatory compliance, and maintain customer trust. Thus, according to Statista, 25% of companies worldwide have increased their cybersecurity budget by 6 to 10%. This way, most FinTech companies will make cybersecurity their proactive and strategic imperative in 2024.

Open banking

Open banking is undeniably a rising trend, evidenced by compelling statistics, with open banking transactions worldwide reaching a substantial $57 billion in 2023 and an anticipated wave in open banking API calls to 580 billion by 2027.

The UK is a prime example, boasting the highest number of third-party provider registrations in Europe, with 217 registrations in the second quarter of 2023 alone. Moreover, the UK experienced an astounding rate of over one billion successful API calls related to open banking nearly every month throughout 2022 and 2023, underscoring the widespread adoption and integration of open banking infrastructure. These statistics collectively affirm that open banking is not merely a passing trend but a transformative force shaping the future of financial services globally.

Generative AI

Generative AI is definitely one more significant trend in FinTech for 2024, and the statistics affirm its growing importance. According to recent research, the Generative AI in FinTech Market is projected to soar to $6,256 million by 2033 from $865 million in 2023, boasting a CAGR of 22.5% during the forecast period from 2024 to 2033.

This rising trend is fueled by Gen AI’s ability to automate complex processes, reduce costs, minimize errors, and improve customer experiences. Specifically, generative AI is making waves in credit card fraud detection, where it leverages Generative Adversarial Networks to differentiate between hacked and genuine data in transactions, alerting banks promptly.

Moreover, within the FinTech sector, AI is revolutionizing the delivery of financial services, mainly through automatization, improving efficiency, and providing 24/7 customer support. As the market continues to evolve, generative AI is expected to play a pivotal role in addressing challenges such as risk assessment and personalized financial advice, thus taking the FinTech industry to the next level.

Blockchain and cryptocurrency

Blockchain and cryptocurrency are rapidly arising as transformative forces in fintech, offering numerous advantages to the industry. Through blockchain’s decentralized and immutable ledger, transactions become more secure and transparent, reducing the risk of fraud and enhancing trust among participants.

Further, blockchain technology streamlines processes, cutting down transaction costs and accelerating settlement times, thus improving overall efficiency. Therefore, the Fintech Blockchain Market is estimated to be $4.66 billion in 2024 and is expected to reach $31.84 billion by 2029, with a projected CAGR of 46.92% during the forecast period (2024-2029).

Meanwhile, cryptocurrencies extend financial accessibility by providing banking services to unbanked and underbanked populations worldwide, fostering financial inclusion. The global nature of cryptocurrencies facilitates seamless cross-border transactions, promoting international trade and economic growth.

Embedded finances

Embedded finance, a recent trend in the FinTech industry over the past 3 years, involves integrating financial services into non-financial businesses. In the United States, revenue from embedded finance was approximately $22.5 billion in 2020 and is projected to exceed $230 billion by 2025. Thus, in 2022, the United States dominated embedded finance revenue, surpassing $26.5 billion, while the United Kingdom trailed with nearly $4 billion.

Embedded finance is rising due to its ability to offer enhanced convenience and improved customer experience by integrating financial services seamlessly into non-financial platforms. 

For instance, take the partnership between a popular ride-hailing app and a digital payment platform. By integrating financial services directly into the ride-hailing app, users can seamlessly pay for their rides, split fares, and even access loans or insurance services – all without leaving the app. This integration enhances user convenience and experience, especially for individuals with traditional bank accounts or access to financial services. For the ride-hailing company, embedding finance reduces transaction costs and allows them to concentrate on improving their core service.

Neobanks

Neobanks, such as Chime, Revolut (which, by the way, became the most valuable digital bank worldwide in 2023, with a worth of $33 billion, followed by Chime, valued at $25 billion), N26, or Monobank, are undeniably a rising trend in the financial industry. These digital-only banks have gained significant traction due to their user-friendly interfaces, low fees, and innovative features.

With their emphasis on seamless digital experiences and accessibility, neo-banks cater to the preferences of tech-savvy consumers, particularly millennials and Gen Z. Their ability to offer banking services entirely through mobile apps, coupled with features like automated savings, budgeting tools, and real-time notifications, has disrupted traditional banking models. Additionally, the pandemic has accelerated the shift towards digital banking, further propelling neo-banks’ growth as consumers increasingly seek flexible and convenient financial solutions.

Internet of Things

Why is IoT the next trend of 2024 in FinTech? All FinTech companies want to improve customer experiences, streamline operations, and mitigate risks, and they can do so by integrating IoT devices such as sensors, wearables, and connected payment terminals. Financial institutions can also gather real-time data on customer behaviors, preferences, and transaction patterns through IoT-enabled devices, enabling personalized financial services and targeted marketing campaigns.

Moreover, IoT facilitates secure and frictionless transactions, bolstering payment security and reducing fraud risks. With the evolution of IoT infrastructure and the advent of 5G connectivity, the FinTech industry is about to witness further innovations in areas such as contactless payments, smart banking, and data-driven insights, solidifying IoT as a pivotal trend driving the future of finance.

About Author

Kseniia Vyshyvaniuk is a highly experienced content manager and tech writer at KITRUM, a software development company. With over 5 years of experience in the industry, she is a true tech geek and stays up-to-date with the latest tech news and trends.