Fintech Disruptions to Organizations Should be Wary of in 2024

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FinTech companies will need to continue assisting their clients to thrive during challenging economic times and the cost-of-living crisis, in 2024

Consumers are using FinTech to control their finances in new and creative ways. For instance, they use prepaid cards and digital wallets to limit spending and restrict specific spending categories.

Many traditional banks are observing FinTech to learn what they are up to and how they might adopt some of these ideas. 2024 already appears to be a year of change for the FinTech industry, with cutting-edge technologies and strict regulations in place.

According to FinTech Global Market Opportunities and Strategies Report, The global FinTech market reached a value of nearly USD 162,674.5 million in 2022. The market is expected to grow from USD 162,674.5 million in 2022 to USD 388,062.0 million in 2027 at a rate of 19.0%.

In 2024, businesses will see more of these offerings due to partnerships, mergers, and acquisitions. Here are some Fintech disruptions to watch out for:

Adapting Enterprise Models

FinTech, like consumers, must also deal internally with this stark new economic reality. In this time of economic disruption, the payments industry is remarkably resilient.

Many countries are experiencing inflation and interest rates that have not been seen in decades. As a result, consumer and business behavior, as well as payment dynamics, are changing.

Sustainability and Green Financing

In the financial services industry, where the need to concentrate on environmental awareness has rapidly increased in the past few years, green finance will continue to be a hot topic.

This year, sustainable banking will enter a new phase that will make it part of life, going beyond being a trendy term. Financial service providers and FinTech will work together more on cutting-edge sustainability initiatives like tracking carbon footprints and assisting customers in making moral decisions.

Green mortgages are a great example, intended to reward people who buy energy-efficient homes or improve their existing homes to increase their energy efficiency. Green loan programs will become famous as younger investors seek more ethical and climate-conscious investment methods.

Financial service providers must innovate in sustainable practices to guarantee that their product has enduring appeal and genuinely benefit customers and the environment.

In addition, there is a chance to develop goods and services that other competitors in that market can use to support innovation at the level of customer offerings. Startups that want to grow may consider partnerships and acquisitional entrepreneurship as avenues.

BNPL Programs Are Growing

Numerous businesses are now providing BNPL programs, which are growing in number. As prices rise due to inflation, people can purchase goods and services more affordably thanks to various credit options like Buy Now and Pay Later (BNPL).

One of its many advantages is that consumers can use the BNPL system to make payments by scanning a QR code. However, the excessive late fees imposed by BNPL service providers and the fees levied by banks and credit providers who provide BNPL services may hinder market growth in the upcoming years. The BNPL market is getting stronger and stronger.

The Growth of Invoice Factoring

Every business leader knows there can occasionally be a significant difference between revenue and cash flow, particularly when customers request lengthy payment terms and delay until the eleventh hour to make payments.

By taking out loans against the value of invoices, invoice financing can assist markets in bridging that gap. Invoice financing is a short-term loan secured by invoices, in which a company borrows money against amounts due on invoices issued to clients. These trade receivables are then offered as collateral.

Invoice financing is frequently used in the consumer goods, transportation, retail, and construction sectors. Since companies can receive cash immediately without having to wait for customers to pay them in full, invoice finance can be seen as one of the many options for business financing.

Working capital is preserved as a result, and issues with the company’s credit and cash flow are prevented. Then, it can be used as a substitute for financing slow-paying accounts receivable or to satisfy urgent liquidity requirements.

Invoice financing will play a significant role in the FinTech market in 2024 as cash flow continues to determine many businesses’ chances of success.

The Development of Cloud Computing

In recent years, cloud tech has been crucial in assisting SMEs and large businesses, and in 2024, it will continue to play a significant role in the FinTech industry.

Companies can reinvent themselves and pave the way for a technology- and data-first work culture that fosters business continuity and digital transformation by utilizing cloud computing.

Fintech services have made extensive use of applied agile technologies. Bank structures are complex and have distinct functional areas. Modern banks, particularly neobanks, are streamlining their organizational processes and ensuring accountability in the face of widespread digitization by implementing agile technologies.

Cloud computing is fuelling the exponential growth of the FinTech sector. As SMEs seek steady growth in 2024, scalability and flexibility should be their guiding principles.

As firms navigate a recession in 2024, it will be crucial for businesses to stay on top of their credit management game.

The Emergence of Embedded Financing

Embedded finance is one FinTech trend that is expected to take off in 2024. Embedded finance benefits both the provider and the user in addition to the user. With the help of tech, users can make purchases more quickly and easily.

It offers a way for providers to improve customer loyalty with all-in-one purchases and keep solid relationships with the add-on providers. Embedded payments have simplified the payment process for businesses and end-users by removing barriers and satisfying the societal demand for even more convenience.

However, some embedded lending platforms that could cause a credit crunch have only recently started conducting credit checks on users who want to use the facility. These platforms have been operating without regulation for a sizable amount of time.

Also Read: Top 7 Sustainable FinTech Trends for 2024 and Beyond

The Growth of AI in FinTech

Artificial intelligence (AI) has been an essential tech for FinTech companies for some time now. Robotic process automation (RPA) improves the speed and accuracy of operations such as report writing and financial data management (RPA).

Removing human intervention from routine tasks allows for a reduction in staff. As a result, financial institutions are using AI that can adapt to work in a particular industry. It self-adapts to the conditions exhibited by learning from prior experiences with human-machine interaction.

According to Zipdo’s article, AI in finance will automate about 25% of the tasks across banking roles by 2025.

Companies’ operations are changing quickly thanks to RPA and AI, which significantly impact productivity and provide organizations with more profound insights from vast data.

Growth of PaaS

Every business must prioritize customer retention. Many companies have used the platform as a service (PaaS) to raise and maintain retention rates.

Customers can develop new add-ons for the product they initially purchased using the PaaS model. SaaS/PaaS providers will be able to provide customers with a much more individualized experience, which should boost their growth rate and customer retention.

Markets have many brand-new features and add-ons planned for the very early 2024 release.

Making Tax Digital (MTD)

When it comes to filing taxes, businesses have been able to adopt new tools and technologies and a digital mindset. Some people may have found this change intimidating at first.

Still, most people will have quickly seen the advantages of automating and maintaining a digital record of invoices, transactions, and tax filings.

FinTech is renowned for its game-changing innovations, and 2024 will be no different. While some fight it, others fully embrace it.

Fintech companies should construct stronger  financial services to protect against shocks and disruptions. Despite this, the opportunities are endless. Innovation and expansion will abound in 2024.

Swapnil Mishra
Swapnil Mishrahttps://talkfintech.com/
Swapnil Mishra is a global news correspondent at TalkCMO, with over six years of experience in the field. Specializing in marketing technologies, Swapnil has established herself as a trusted voice in the industry. Having collaborated with various media outlets, she has honed her skills in content strategy, executive leadership, business strategy, industry insights, best practices, and thought leadership. As a journalism graduate, Swapnil possesses a keen eye for editorial detail and a mastery of language, enabling her to deliver compelling and informative news stories. She has a keen eye for detail and a knack for breaking down complex technical concepts into easy-to-understand language.

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