Over the coming months, leaders in the financial services industry (FSI) are likely to face many challenges and new financial trends for 2024. These are high interest rates, increased regulatory pressure and a new technological landscape.
This article provides a clear view of the major trends that will influence the financial sector in the coming year and beyond. By leveraging these advancements effectively, banking sectors can expect more efficient and profitable solutions. However, these changes also pose challenges that require careful and ethical management.
Financial trends for 2024 and market outlook for 2024
Generative ai in fintech
The financial sector is changing. Generative artificial intelligence, ChatGPT being one of the most notable achievements, is profoundly revolutionizing the financial and fintech professions.
They will allow investment opportunities or potential risks to be identified much more quickly. Generative ai will also enable advanced personalization of financial services. By studying each client's profile and needs, they can provide personalized advice on investments, loans, insurance and more.
Sustainable Finance
The inclusion of ESG (Environmental, Social and Governance) criteria in corporate strategies is a trend that is gaining ground. Ethical investing, green technologies and renewable energy are now considerations influencing investment decisions and operational practices.
Fintech companies that integrate these criteria into their business model not only improve their image. They develop long-term resilience. Invest in the future to address customer and partner concerns about sustainable development.
Customer service
The use of new technologies will be crucial for the customer experience in 2024. They will provide analysis of each touchpoint in the customer journey. It is important to reduce friction and improve the overall customer experience.
Additionally, new technologies are beginning to enable more engaging options for customers to interact.
To improve the quality of the subscription and save time, a digital twin can be used. This twin helps model an insured asset during high-risk situations. This also allows us to offer better prices. Therefore, more financial services will prioritize this in 2024.
ai-powered insurance
Although artificial intelligence grows a little more every day, insurance companies are also investing in ai.
“Some insurers, which have been implementing efficiency plans for years, find themselves facing a glass ceiling. Thanks to ai they will be able to make an important leap.
We see this particularly in the generation of computer codes or in the automatic generation of reports. For large risks, you can improve underwriting quality and save time by using a digital twin to model an insured asset. This also allows us to offer better prices.
ai accelerates the process of understanding customers and categorizing them into segments to deliver personalized offers and experiences. Additionally, it improves on-demand insurance.
Open Banking
It is not about announcing the end of historical models that. Despite everything, they demonstrate their resilience year after year. But emphasizing that Open Banking is a good incentive for the current revolutions, a long-term journey in which there is no step back.
Open Ba today brings together a community of innovators and developers with more than 10,000 members. This project provides banking IT and Fintechs with open standards and platforms, thus promoting Open Banking.
Fintech companies are benefiting from this movement. Account aggregators can access customer information and savings accounts because customers authorize them, not because of the regulator.
In the jargon we then speak of “Data Scraping” carried out by Fintech to the detriment of historical actors. Stopping data scraping is difficult because it depends on consumers allowing access to their banking details through a username and password.
The bank is not sure if it is the customer or someone else (such as Fintech or an aggregator) accessing their account.
Cybersecurity and fraud detection
Cybersecurity will continue to be a key trend in the financial sector. ai-based security solutions can analyze large amounts of data. And they can detect fraudulent activity and anomalies in real time. By providing stronger identity verification, they improve the overall security of the open banking platform.
Fintechs should expect an increase in cyber threats, making sophisticated and responsive security measures essential. Adapting quickly to regulatory changes is a guarantee of credibility with consumers and investors.
Financial trends to 2024: outlook for financial markets
Looking ahead to 2024, we expect both inflation and economic demand to decline. The growth and risk market tailwinds are diminishing, making us cautious about the performance of risk assets and the broader economic outlook. This caution arises from growing monetary challenges, geopolitical risks and high asset valuations.
A sustainable economic acceleration or risk rebound appears unlikely without a significant reduction in interest rates and a reversal of quantitative tightening. This creates a vicious circle situation in which risk assets cannot recover under current monetary restrictions, and decisive easing may not occur unless there is a market correction or a decline in inflation, which could lead to market declines and volatility in 2024.
Although it is now a common belief to avoid recession, signs of yield curve inversion suggest a high risk of recession for most of 2024.
As for the stock market, the S&P 500 fell almost 20% in 2022 due to rapid interest rate hikes by the Federal Reserve, but recovered somewhat in 2023. Despite the positive performance of stocks until the To date, earnings growth has not been as strong as expected. Stock concentration in the S&P 500, driven by a few mega-cap technology stocks, is at levels last seen in the 1970s. This situation, coupled with the end of record pricing power as the High inflation eases, points to big challenges for corporate margins in 2024.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod?n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window,document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);fbq(‘init’,’504526293689977′);fbq(‘track’,’PageView’)
