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  • Writer's pictureMohamed Soltan

The 6 Fintech Trends Investors Must Know in 2024

Staying informed of trends in the dynamic landscape of financial technology, or fintech, is imperative for investors looking to navigate the complexities of the market. As 2024 promises to be a pivotal year for fintech, identifying the signals that should shape investment strategies is more essential than ever. Read on for six fintech trends to expect in the new year. 


  1. Return of Funding 


There's been a recent retraction of venture funding from fintech, but this trend will U-turn in 2024. Prospective investors need to contextualize the spate of high-profile fintech failures we've experienced. First, The Wall Street Journal reports a failure rate of 75 percent of venture-backed fintechs. Compared to the average overall startup failure rate of 85 percent to 90 percent, that's not so bad. And remember, fintech covers a range of different business models, from digital wallets to stock trading and life insurance. So, within the sector, churn rates are not only natural but also quite varied. 


There is also reason to believe that the failure rate will lower as the sector matures. For example, many of the failures we've seen recently were businesses conceived during the pandemic. Their business models were built on unsustainably low interest rates and fell apart post-pandemic. Also, many new entrants simply underestimated the extent of the industry's regulatory and data protection requirements. These are lessons we might consider learned at this stage.  


  1. Increased Use of AI 


Fintech has long been at the forefront of automation and the use of AI. In 2024, we can expect an increase in applications using generative AI. Some of the most common use cases for such apps will include: 


  • Customer Experience—Enhancing the customer experience through chatbots and AI-generated analysis of customer behavior and buying patterns 

  • Credit Assessment—Using AI to access loan applicants’ data for faster and more accurate credit processing 

  • Fraud Alerts—Close to instantaneous identification of fraudulent activities 

  • Stock Trading—Improved risk evaluation and portfolio management through AI-driven robo-advisory tools and algorithmic trading solutions 


  1. Increased Regulation 


Fintechs will increasingly be under scrutiny from industry regulatory bodies that are catching up to the new technology trends. Investors should look for fintechs that are investing in RegTech, which caters to regulatory requirements without distracting the internal tech teams from their core product focus. Investors should also seek out companies actively engaged in regulatory sandboxes frequently provided by regulatory bodies. Additionally, they should focus on entities utilizing adaptive technology capable of swift adjustments to accommodate and collaborate with emerging regulations. 


  1. Increased Use of Stablecoins 


Looking ahead, we will see a continuation in the mainstream adoption of cryptocurrencies. However, the associated increase in regulation of DeFi (decentralized finance, which integrates cryptocurrency and blockchain technology) is predicted to increase the popularity of stablecoins. Stablecoins are cryptocurrencies linked to a “stable” currency or a commodity, like dollars or gold, to help stabilize their price, which, in turn, makes them more palatable to regulators. 


Stablecoins have historically served as settlement tools for traders. Now, businesses are increasingly accepting them as payment thanks to innovative fintech tools that make them more accessible and easier to convert to fiat currencies. 


  1. Shift to SaaS Revenue Models 


To attract funders, experts predict that fintech will shift away from their eroding transactional fee revenue models to SaaS-type revenue models. As fintechs engage in more interchange-heavy transactions than traditional financial institutions, the traditional fee models fall apart. This shift to more traditional software distribution models will provide more predictable income, making the businesses far more scalable.  


  1. Sustainable Finance Solutions 


International pressure for finance institutions to reduce their environmental impact will fast-track fintech adoption, specifically in payments. Digital payments facilitated by fintech solutions like mobile wallets and peer-to-peer transfers eliminate the need for printed receipts, plastic cards, and paper currency. 




In conclusion, 2024 holds the potential for transformative changes in the fintech landscape. Investors would be prudent to align their strategies with these emerging trends. The expected resurgence of funding, the growing integration of AI, heightened regulatory scrutiny, the adoption of stablecoins, a notable shift toward Software as a Service (SaaS) revenue models, and the industry's push toward sustainable finance solutions collectively highlight the dynamic and evolving nature of this sector. 


By recognizing these key trends and making informed investment decisions, stakeholders can position themselves to weather the changes and thrive in the evolving fintech landscape. As we step into the future, the convergence of finance and technology is poised to redefine the industry, presenting both challenges and unprecedented opportunities for those keen on navigating the financial terrain of 2024. 

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