• Daniel Mayhew, CEO at Nucleus365


• 06.02.2024 02:00 pm
#innovation #payments #trading

The needs for businesses and merchants conducting trade internationally have evolved with new technologies and regulations meaning fintechs have to constantly adapt to changing priorities to maintain a competitive edge. Considering this, fintechs that offer multiple solutions will be highly sought after as merchants look to fulfill their business objectives while keeping their overhead costs to a minimum. 

As we start 2024, several key trends will shape the future of fintech and impact how businesses manage their finances. 

Cross-Border Payments: Breaking Down Barriers

In 2024, significant advancements in technologies that will further streamline cross-border transactions can be anticipated as fintechs look to ease the process of sending and receiving money across borders. Additionally, as regulatory compliances are updated, fintechs and payment platforms with robust currency management programs with multiple licenses to support multiple currencies will become more popular with businesses engaged in global trade. 

Furthermore, emerging markets like the Middle East and south-east Asia are seeing an increase in global business activity. Such moves will likely facilitate more cross-border payments leading to fintechs who can operate in those regions gaining more traction. 

Real-Time Payments: The Need for Speed

The demand for real-time payments has been steadily growing and is likely to reach new heights this year. Consumers and businesses alike expect transactions to be swift, secure, and accessible around the clock. The adoption of instant payment systems will become the norm, driven by the need for efficiency and immediacy in financial transactions.

Fintech companies that can offer real-time payment solutions will gain a competitive edge, and traditional financial institutions will need to adapt swiftly to meet this demand. 

Market Consolidation: Forging Stronger Alliances

In Q3, 2023, the Fintech sector experienced a surge in mergers and acquisitions, a trend expected to persist into 2024. A confluence of factors drives this heightened activity, including a plateau in funding for younger fintechs and start-ups, prompting a growing necessity for them to either merge with or be acquired by more established players. Simultaneously, as the fintech landscape matures, investors are becoming more discerning, gravitating towards safer investment options, fueling a cycle of increased M&A.

The evolving fintech space is also witnessing traditional banks adapting to this dynamic environment. In their pursuit of leadership in financial innovation and relevance in the sector, banks are strategically acquiring fintech companies with the aim to seamlessly integrating into their established frameworks. This strategic shift signifies more than just keeping pace with technology; it reflects a broader commitment to fostering a culture of adaptability and customer-centricity. 

Beyond the surge in M&A, the industry is poised for the emergence of innovative solutions designed for easy integration into existing financial systems, bridging the gap between innovation and stability.

Push Payment Fraud: A Growing Concern

Lastly, while innovations and technology in the fintech space advance, so do the tactics employed by cybercriminals, an increased focus on combating push payment fraud can be expected. As the number of AI-based scams increases, so does the need for robust security measures. Fintech companies are likely to invest more heavily in advanced fraud detection and prevention mechanisms, leveraging AI and machine learning to identify and mitigate risks in real time. 

Educating businesses about the evolving nature of fraud and implementing multi-layered security protocols will also be paramount, while collaboration within the industry and with regulatory bodies will be crucial.

The fintech industry continues to evolve at a rapid pace, with new technologies and innovations disrupting traditional financial services. In line with this, merchants and businesses will look towards consolidating their financial needs to a single entity, therefore fintechs that operate as a one-stop shop for their customers will likely be in high demand.