I’ve acquired dozens of 2024 fintech traits prediction pitches in my e mail inbox over the previous month. And whereas lots of them are insightful, I wished to see what our AI overlord ChatGPT needed to say concerning the matter.
My immediate learn, “What are your predictions for the highest 5 latest and hottest traits in fintech for 2024?” Right here is how the AI responded:
Predicting the precise traits for 2024 is speculative, however listed below are potential rising traits in fintech:
Embedded Finance: Additional integration of monetary providers into non-financial platforms like e-commerce, SaaS, and marketplaces. This pattern will provide customers seamless entry to monetary merchandise inside their day by day actions.
Metaverse Finance: With the rising recognition of the metaverse, fintech may discover digital currencies, digital property, and decentralized finance (DeFi) options tailor-made for this area.
AI-Powered Personalization: Enhanced AI-driven instruments for hyper-personalized monetary suggestions, wealth administration, and banking providers. AI will additional analyze huge datasets to supply tailor-made monetary recommendation.
Local weather and Sustainable Finance: Continued development in inexperienced finance, affect investing, and ESG-driven monetary merchandise as shoppers and traders prioritize sustainability.
Regulatory Evolution: Fintechs navigating evolving rules, particularly round information privateness, digital currencies, and open banking. Compliance and adapting to regulatory modifications will stay essential.
As common, ChatGPT not solely did a fairly good job, nevertheless it additionally sounds fairly convincing. And whereas there are really no blatant errors within the prediction, it might be higher. Right here’s what’s mistaken or what’s lacking in every of the 5 predictions.
Embedded finance
ChatGPT was spot on. It’s fairly apparent that this shall be a giant pattern in 2024. Why? As a result of it’s a giant pattern proper now. Nevertheless, that is extra of a continuation of a present pattern somewhat than a brand new pattern in 2024. Additionally, ChatGPT failed to say the position that regulation will probably play in embedded finance subsequent 12 months, particularly within the U.S. That’s as a result of companion banks have turn into extra cautious to companion with fintechs after the FDIC issued a consent order to Cross River Financial institution, saying that it was concerned in unsound banking practices. The place there may be alternative, there may be legal responsibility.
Metaverse finance
ChatGPT was mistaken. That is one pattern that may be thrown away with all of these 2023 desk planners on the market. The metaverse supplied a enjoyable distraction through the pandemic, when the trade was obsessive about shifting all of a financial institution’s operations to digital channels. Nevertheless, most shoppers lack curiosity in shifting their lives to the metaverse, and banks have realized that their investments in additional conventional channels usually tend to repay.
AI-powered personalization
That is one other win for ChatGPT. Nevertheless, personalization will not be the one AI-powered facet of banking and fintech that may surge in 2024. Many organizations are actually turning towards generative AI, which has the potential to supply artistic outputs for producing funding methods, designing monetary merchandise, constructing advertising and marketing campaigns, simulating information to foretell market actions, simulating financial eventualities, or stress-testing monetary programs.
Local weather and Sustainable Finance
Whereas I wish to imagine ChatGPT on this prediction, I wouldn’t record it among the many prime 5 traits for 2024. There are two main the reason why sustainable finance will take a backseat (although not disappear) subsequent 12 months. First, the excessive value of capital has each banks and fintechs looking for new income alternatives. Given this excessive rate of interest setting, companies are extra targeted on direct cost-saving and income development initiatives resembling AI. Second, in lots of geographies, regulation has not caught up with sustainability initiatives. This lack of regulation and trade requirements makes it tough for organizations to pose definitive claims about what they’re doing for the setting.
Regulatory evolution
That is completely among the many prime traits I’ve my eye on for 2024. Once more, this can be a continuation of a present pattern and never a brand new improvement, however it can stay on the forefront in fintech subsequent 12 months. ChatGPT cited regulatory modifications throughout information privateness, digital currencies, and open banking. With reference to open banking, the CFPB launched its discover of proposed rulemaking to implement Part 1033 of Dodd-Frank earlier this 12 months and made clear that it’s going to situation the ultimate regulation within the fall of 2024.
One piece that ChatGPT left off its record of anticipated regulatory modifications is the formalization of guidelines round purchase now, pay later (BNPL) corporations. As shoppers depend on BNPL cost applied sciences as an alternative choice to conventional credit score fashions, regulators in each the U.S. and the U.Ok. have introduced their intent to formalize regulation within the area.
Photograph by Matheus Bertelli
