Although fintechs have already radically altered how consumers manage, transfer, and invest their money, significant opportunities exist for the sector in 2024. From the democratization of access to basic financial services and wealth-building resources to the accelerated growth and adoption of blockchain technology, this will be a pivotal year for fintech. While there will be a profusion of innovative new companies in the sector, we will also likely see a shift toward super apps that integrate payments with many other products.
Despite the rapid expansion of fintech in recent years, there are still massive untapped markets. For example, consumers in lower socioeconomic brackets need to be capable of building credit, creating savings and checking accounts, preparing their taxes, and so on. There are many unbanked people around the world who will need access to these services in the very near future, and crypto will continue to serve as a bridge to traditional finance for many of them. Meanwhile, institutional adoption of crypto (in the form of Bitcoin ETFs, for instance) will revive investor interest in blockchain-powered fintech solutions and Web3.
The evolution of fintech in 2024 will create immense value for investors by meeting the needs of a huge pool of customers who are currently underserved by the banking and finance industries. This presents a unique opportunity for disruptive companies, technologies, and products that will empower users to put their money to work like never before.
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Fintech and the democratization of finance
While most people take basic financial services for granted, there are still many Americans who lack access to these services. In fact, 6 percent of American adults are unbanked, which means they don’t have a checking, savings, or money market account. The situation is even more dire globally – 1.4 billion people are unbanked, and 29 percent of people in developing countries have no financial account. However, this proportion is down sharply from 58 percent a decade ago and more people are gaining access to financial services every day.
Fintechs are at the forefront of this financial revolution. As traditional banking declines in emerging markets, fintech usage has surged – the value of digital financial transactions in Africa jumped from 26 to 35 percent of GDP between 2021 and 2022. The COVID-19 pandemic catalyzed this trend – in 2022, the World Bank reported that 40 percent of people in developing countries who made a digital payment did so for the first time since the start of the pandemic.
Many Gen Z and Millennial investors are shifting their focus from speculative asset classes (such as cryptocurrency and tech equities) to long-term wealth-building strategies. Young and low-wage workers need all the help they can get – while 92 percent of workers in the highest income quartile have access to retirement benefits, this proportion falls to less than half in the lowest quartile. Fintechs can bridge this divide by providing greater access to lending and investing tools for underserved people.
Consumers want greater control over their finances, but they also want financial services to be accessible and understandable (especially if they’re opening accounts or exploring investment options for the first time). This is why the most successful fintech platforms will focus on independence, simplicity, and transparency as they democratize their services in 2024.
Blockchain and Web3 are poised for a resurgence
After hitting all-time highs in late 2021, crypto experienced a protracted period of decline and volatility over the two years that followed. But 2024 is set to be a turnaround year. With the recent SEC approval of Bitcoin exchange-traded products, 11 spot Bitcoin ETFs immediately hit the market – including offerings from BlackRock and Fidelity. These ETFs saw $4.6 billion in transactions on their first trading day. Other factors such as the upcoming halving of Bitcoin and the growing vendor acceptance of crypto will drive even greater momentum in 2024.
One reason blockchain will see rising investor interest and commercial adoption this year is the fact that core developer activity didn’t collapse as investors fled the space. Part of the blockchain revival in 2024 will be attributable to more speculation and steadier macroeconomic conditions. But the essential value of many blockchain applications will also be clearer than ever. As with AI, there will be more revenue-generating projects in Web2.5 and Web3 as founders and developers increasingly monetize their solutions.
The Web2.5 and Web3 companies that achieve scale in the coming years will be the ones most effective at leveraging innovative technology like blockchain for sustainable revenue growth. Investors will be more attracted to these technologies in 2024, but companies will be under pressure to demonstrate that they’re capable of capturing market share.
Super apps are on the rise around the world
Super apps like Alipay and WeChat – which provide sprawling service ecosystems on centralized platforms – have been dominant in China for years, but they’re now emerging in other markets. Fintechs like Square, Robinhood, and Revolut are moving into adjacent consumer services, while social media platforms are exploring payments and other fintech possibilities. Elon Musk often declares his intention to turn X into an “everything app,” and the company recently announced that it will launch peer-to-peer payments this year. Similarly, Mark Zuckerberg says he has a “super app-like vision” for Meta and WhatsApp.
Jio Platforms – which provides everything from 5G infrastructure and cloud services to IoT solutions and blockchain products – raised over $20 billion from Meta, Google, and other major investors in a huge 2020 funding round. While the company was valued at $65 billion then, Bank of America recently increased this valuation to $107 billion. Companies have compelling reasons for developing super apps – by creating powerful ecosystems of their own products and services, they can increase active users across categories, seize market share, and reduce competitive pressures. Consumers are attracted to the idea of consolidating the countless apps they use – a recent survey found that 72 percent are interested in super apps.
As major tech companies develop super apps, rapidly growing startups are using revolutionary technology like AI and blockchain to disrupt their industries. Meanwhile, all of these developments are drastically changing the lives of consumers around the world – from how we communicate to how we save and invest money. These are just a few of the reasons why fintech will be even more dynamic and fast-moving than usual in 2024.
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