TLDR:
- 2024 is expected to see gradual growth in fintech investments
- Major trends to watch out for include sustainable finance, generative AI, RPA, CFO tech, asset tokenization, alternative assets, indexing, and next-generation compliance tools
2023 acted as a reset year in the venture capital ecosystem as investments witnessed their first significant drop since 2017. In 2024, investors anticipate gradual growth in both the number and size of funding rounds compared to 2023, with massive opportunities for fintech startups in the areas of generative artificial intelligence (gen AI), sustainable finance, business-to-business (B2B) solutions, tokenization, and other trends highlighted in a report by American VC firm Plug and Play.
The “Fintech Megatrends 2024” report, released in March 2024, shares the major trends to look out for this year, drawing on market research and interviews with VCs and investors from various firms.
Sustainable Finance
One of the major trends expected for 2024 is sustainable finance. Despite efforts to reduce greenhouse gases, challenges still exist. This has created opportunities for startups in renewable energy, carbon capture and accounting technologies, circular economy solutions, and precision agriculture technologies.
Generative AI Integration and RPA
Generative AI technology and robotic process automation (RPA) are anticipated to see increased demand in 2024. The complexity of integrating AI, lack of accuracy, and data quality issues have created opportunities for fintech startups to help enterprises effectively incorporate gen AI into their systems. RPA, on the other hand, is expected to help banks cut costs and improve efficiency.
CFO Tech and B2B Fintech
In 2024, CFO tech, dedicated to helping CFOs manage financial operations more efficiently, is expected to grow. This includes tools to improve accuracy, efficiency, compliance, and decision-making within the finance function. Additionally, the B2B fintech sector is forecasted to see growth with the rise of alternative assets and tokenization.
Next-Generation Compliance Tools
Next-generation compliance tools are expected to gain prominence in 2024 due to the increasing threats of financial crimes. Regtech startups are predicted to leverage technologies like gen AI models to combat fraudulent activities and streamline compliance processes.
