Burgeoning Fintech Industry and Noteworthy Trends To Watchout For in 2024

As per the Geo Quarterly India FinTech Report (Q1 2024) by Tracxn, a credible market intelligence platform, India has secured the third position globally in terms of funding raised for the FinTech sector in Q1 2024.  This upward trajectory really showcases how bullish the growth has been in the sector today. So, if we review it with respect to the numbers, a total of staggering USD 551 million was funded in the first quarter of 2024; a commendable 59 percent increase, compared to USD 346 million raised in the previous quarter (Q4-2023). Additionally, the report also showcases several niches of the industry that have witnessed notable development.

Now let's examine some of the noteworthy trends that is expected to disrupt the fintech sector in 2024 as it expands:

Regtech (Regulatory Technology)

One must be aware of and abide by the rules, standard procedures, and regulations that regulate the activities of financial institutions. Accounting documents, tax returns, income reports, and customer reports are all required of businesses. They deliver necessary papers to regulatory organizations in accordance with the schedule. They confirm the legality of the action and the correctness of the data. In this case, regulatory technology can be useful.

Technology known as "RegTech" is used to keep an eye on regulatory compliance. Regulatory technology finds noncompliant problems and fixes them to integrate with the system. Expert software monitors data security, automates repetitive tasks, and warns users and bank employees of fraud. RegTech facilitates communication between enterprises and regulatory bodies, allowing uninterrupted data transmission, compliance monitoring (e.g., by complying to PCI compliance regulations), and financial crime tracking.

Financial Decentralization (DeFi)

Decentralized finance, while associated with alternative financial instruments and the bitcoin market, is a new and emerging fintech concept for 2024. DeFi is embodied by a range of decentralized financial solutions that operate in a decentralized manner, including:  applications for payments, swaps, loans, etc.

Users can feel more confident knowing that DeFi is open source and relies entirely on self-executing smart contracts for administration. It now facilitates communication across different blockchains, taking the bitcoin market to a new level accessible to a wider audience. Numerous DeFi projects are available on the market to rival centralized banking systems.

Robotic Advisors

Artificial intelligence has made it possible for many investors to gain from automated, individualized financial advice. AI concepts are used by robo-advisors and personal financial managers to suggest the best methods for investors to spend their money. These kinds of applications are incredibly lucrative and a disruptive force in the market.

Robo-advisers, using AI data analysis algorithms, are able to:

Examine enormous amounts of data, more quickly adapt to a changing environment than do human counsel,  Provide the greatest financial options to help investors reach their goals.  Since alternative investment instruments have significantly lowered the entry barrier for investors and enabled almost anybody to produce money, even with little funds, robotic process automation is especially popular with novice investors who do not have access to traditional counseling.

Coins with Stablecoins

One of the promising fintech developments that the world is witnessing today is stablecoins which can be termed as virtual currencies which are being backed by an underlying reserve. It is typically a fiat currency like the US dollar or a commodity like gold. Stablecoins are known to significantly drive stability which brings many key elements to the forefront of the finance sector and solves a major issue that conventional cryptocurrencies face: volatility.

Stablecoins' stability helps to close the gap between the old financial institutions and the cryptocurrency sector. Stablecoins facilitate international trade by offering a reliable and safe means of exchange. Although governments, powerful institutions, and well-established cryptocurrency exchanges are now in charge of such projects, stablecoins' growing popularity raises the possibility of their being adopted more widely.

Paying by Voice

By 2025, there will be 8.4 billion voice assistants on the earth compared to people, predicts Statista. Fintech companies aim to use customer preferences and financial management to augment the adoption of digital assistants.

Voice biometrics will provide dependable data protection for the user. The owner will be able to purchase goods, use voice control to check the balance, and carry out other tasks simultaneously.

Voice assistants are a popular way for consumers to bank (44%), according to the Capgemini Digital Transformation Institute. As a pioneer in voice payments, Capital One Corporation long ago launched Amazon Alexa, a tool that lets customers pay their credit card bills online. Instead of using chatbots, managers, or contact center operators to advise clients on complex matters, other FinTech companies are implementing voice assistants.

Gamification

Fintech gamification can be termed as the utilization of technology in the financial industry businesses to enhance their client’s experience. Today, gamification has greatly helped businesses in not only increasing their revenue, but also driving customer loyalty, brand loyalty, and many other positive outcomes. So, if we look at it from the consumers’ lens, they become more comfortable in interacting with technology. The value of the gamification market has witnessed quite an upsurge during the last five years.

Today, several firms are integrating gamification into their corporate strategy in an effort to remain engaging and competitive. Consequently, there are quite a number of companies that have started using games to market their products, interact with clients, and instill a feeling of ownership in them.

So to conclude, FinTech sector will continue its growth trajectory going forward, witnessing advancements as per the changing market dynamics and consumer’s expectations. Finance Outlook India would always be at the forefront to shed light on the transformation in the world of finance so as to keep our readers parallel with all the advancements in the world of finance.