FinTech Trends: Read These To Improve Your Sales

Financial institutions as we know them are changing fast, and FinTech companies everywhere are scrabbling to capitalize on it. In the last year alone, the FinTech industry has exploded, with FinTech companies growing in number in every region of the world. In fact, the global market size of the FinTech industry is set to reach around $340 billion.) in 2024.

This rapid growth is fueled by a dynamic fintech ecosystem, where various fintech sectors—such as payments, lending, and banking—interact and drive innovation through collaboration and integration.

It’s no wonder, then, that the FinTech landscape is so competitive. And with that competition, comes constant evolution. Digital payments, robotic process automation, consumer preferences, and data security are driving faster and faster change. Fintech funding and venture capital have played a major role in this expansion, with shifts in investment between fintech sectors shaping the market’s direction and highlighting emerging opportunities. For FinTech companies and FinTech startups, keeping up with FinTech trends can feel like a full-time job.

Macroeconomic factors, including economic uncertainty and fluctuating interest rates, also significantly influence fintech trends and investment patterns, impacting how companies adapt and grow in this evolving industry.

That’s why Leadium’s put together a comprehensive list of up-to-date FinTech trends in 2024. Sit back while we explore some of the most transformational financial industry trends shaping the future of finance and the FinTech market; from AI and blockchain technology to RegTech and open banking, these are the trends you need to know about.

Introduction to FinTech

The financial services industry is in the midst of a digital revolution, thanks to the rapid rise of financial technology—better known as FinTech. FinTech companies are transforming the way individuals and businesses handle financial transactions, making everything from opening a bank account to managing investment portfolios faster, easier, and more secure. This surge in innovation has led to a booming FinTech industry, with the global FinTech market projected to surpass $300 billion by 2025.

What’s driving this explosive growth? Advances in technology, shifting consumer preferences, and the demand for seamless, secure financial services are all key factors. Financial institutions and banks are embracing digital wallets, mobile payments, and online lending platforms to meet the evolving needs of their customers. These innovative solutions are not only streamlining traditional banking processes but also opening up new opportunities for both established players and agile FinTech startups. As the financial industry continues to evolve, staying ahead of the latest FinTech trends is essential for anyone looking to thrive in this dynamic market.

Buy Now Pay Later (BNPL) Solutions

‘Buy Now Pay Later’ solutions do exactly what they say on the tin: they enable customers to make a purchase now and pay for it, usually in instalments, at a later time. As a FinTech solution, BNPL is particularly popular among younger age-groups, in particular those aged 18-24. 16% of people in that age bracket report using BNPL FinTech solutions regularly. In fact, more than half of consumers in some regions have used BNPL or similar services, highlighting the widespread adoption and popularity of these options.

Why are Buy Now Pay Later solutions so popular?

Individuals and businesses worldwide choose BNPL for their financial transactions for a variety of reasons, not least because it enables them to:

• Increase their Average Order Value (AOV)

When consumers can spread payments over time, they are more likely to make larger purchases. Some studies suggest integrating BNPL can increase your AOV by 87%).

• Reduce cart abandonment

Put simply: consumers are more likely to complete their purchases when they don’t have to pay the full amount upfront. BNPL solutions are particularly effective for online purchases, as they make it easier for consumers to finalize transactions during online shopping.

• Attract new customer segments

BNPL appeals to younger consumers who might not have access to traditional credit but are comfortable using instalment payment methods. That’s a great way for businesses to open the doors to new demographics.

AI-Powered Financial Services

We can’t talk about the evolution of the financial services industry - or any industry, for that matter - without touching on Artificial Intelligence. From banking services and fraud detection to financial data and regulatory compliance, Artificial Intelligence is playing a huge role in shaping almost every aspect of the banking industry. In particular, AI and machine learning are increasingly used to identify potential fraudsters by analyzing data patterns and proactively preventing fraud before it occurs.

AI in the FinTech industry already boasts a market value of around $44 billion, and is projected to rise.

Why do financial institutions love AI?

Well, it's complicated. There are still plenty of traditional banks that aren't yet convinced about AI (especially where fraud detection and data security are concerned), but many financial institutions and young, up-and-at-'em FinTech companies are ready to jump right in.

That's because Artificial Intelligence offers a range of impressive advantages, including:

• Personalized product recommendations

Many AI-powered sales platforms and FinTech solutions analyze customer data (e.g., spending habits, browsing history, and financial goals) in huge volumes in the blink of an eye, letting them offer hyper-specific recommendations.

• Optimized pricing strategy

AI can be used to develop dynamic pricing strategies that adjust in real-time based on factors like demand, competition, and customer behavior, maximizing profit margins and identifying optimal price points.

• Improved fraud prevention and security

We pointed out that many traditional banking services are worried about AI for precisely this reason, but many AI-enthusiasts would argue the exact opposite: that AI empowers financial institutions to detect unusual patterns and flag potential fraud in real-time, thus protecting both the business and its customers.

Blockchain Technology and Cryptocurrency

To many outside the financial industry and tech worlds, blockchain and cryptocurrency sound like something from the future. But ‘the future,’ as many have said, ‘is now.’

While blockchain and cryptocurrency aren’t the same thing (‘blockchain’ a virtual chain of blocks that stores and authenticates data, while ‘cryptocurrency’ is a general term for electronic currencies that use blockchain), both are becoming increasingly popular. Influential banks are playing a key role in shaping the adoption and regulation of these technologies, working alongside governments and established exchanges to drive large-scale financial initiatives.

And that popularity isn’t limited to the financial sector, either: many industries, including Healthcare, Supply chain management, Asset management, and even entertainment, are seeing the potential of decentralized finance - and FinTech companies are taking notice.

What are the benefits of blockchain and cryptocurrency?

It's important to note that neither technology is without its critics. However, the tech is making waves in the banking industry and elsewhere due to its speed and efficiency. In fact, despite concerns, the global blockchain market is expected to grow to around $248.9 billion by 2029.

Here are some of the benefits banking services and payment providers see in the tech:

• Access to new markets

Traditional banks and traditional banking services aren't available everywhere. A FinTech company may be able to increase financial services within those emerging markets using cryptocurrency.

• Faster and cheaper transactions

The simple truth is that blockchain tech enables faster and cheaper transactions compared to traditional payment services, and cryptocurrency transactions often involve lower fees, especially for cross-border payments. Again, this opens up financial services to many across the globe.

• Enhanced security

Okay, we may get flak for this. Many financial institutions and financial advisors remain wary of blockchain's supposedly 'watertight' security systems.

Generally, though, these innovative solutions are considered safer than traditional payment methods. Users point to its resistance to fraud and hacking due to its decentralized nature and cryptographic protection.

Regulatory Compliance Technology (RegTech)

Did you know that almost a quarter of all American businesses say that staying on top of regulatory requirements is the most important problem they face?

Many FinTech companies have registered this fact and are producing solutions to aid business owners. RegTech helps businesses comply with regulations more efficiently and effectively. It involves automating complex compliance processes, managing risk, and ensuring adherence to legal standards in industries like finance, insurance, and beyond.

Why do businesses love RegTech?

Well, think about it: how much time would you save if regulation and compliance was basically taken care of by your software? There are many reasons why financial institutions and other industries are adopting RegTech:

• Lower compliance costs

RegTech solutions reduce the costs associated with manual compliance processes, such as hiring large compliance teams and conducting frequent audits.

• Efficiency gains‍
  

Automating compliance tasks through RegTech allows businesses to operate more efficiently; they can free up resources and focus on sales activities.

• Enhanced customer trust and brand loyalty‍

Strong compliance practices, supported by RegTech, can enhance customer trust by ensuring that the business operates within the bounds of the law and protects customer data.

Open Banking and API Integration

The Open Banking industry is a growing industry taking FinTech businesses and the financial sector by storm. For those who don’t already know: Open Banking allows third-party financial service providers to access consumer banking, transaction, and other financial data from banks and other financial institutions through the use of APIs (Application Programming Interfaces) - all with the consent of the customer. Embedded finance refers to the integration of financial services into non-financial platforms, and open banking is a key enabler of this trend by allowing seamless access to banking capabilities within various apps and services. Embedded payments are a core component of open banking, enabling users to make transactions directly within platforms and apps for a more streamlined experience.

Why is Open Banking so popular in the financial industry?

There are a number of reasons why the FinTech industry is honing in on Open Banking. Whereas traditional banking is more centralized, Open Banking offers a faster, more efficient decentralized financial services.

• Personalized financial services

‍Open Banking allows businesses to access detailed customer financial data (with consent), enabling them to offer personalized financial products and services.

• Improved customer experience

Unlike traditional banks and financial services, Open Banking empowers users to manage multiple financial services and bank accounts from a single platform. It also streamlines digital payments,  increasing convenience.

• New revenue streams

Open Banking allows financial institutions to partner with third-party providers (such as a FinTech company, insurance companies, and investment platforms) to offer additional services through their APIs.

Security and Risk in FinTech

As the FinTech industry continues to expand, security and risk management have become top priorities for financial institutions and consumers alike. The shift toward digital payments and online financial services has introduced new vulnerabilities, making robust security measures more important than ever. FinTech companies are responding by implementing advanced encryption, two-factor authentication, and regular software updates to safeguard sensitive financial data.

Regulatory compliance is another critical aspect, ensuring that FinTech companies operate within legal frameworks and protect their customers’ information. Many financial institutions are investing heavily in cybersecurity infrastructure to prevent fraud and maintain trust. The integration of artificial intelligence and machine learning is proving invaluable in identifying suspicious activities and preventing financial losses, while blockchain technology offers an additional layer of security by making it harder for hackers to tamper with financial data. By prioritizing security and risk management, the FinTech industry is working to build a safer, more resilient financial system for everyone.

Customer Experience and Engagement in Financial Services

In today’s competitive FinTech landscape, delivering an exceptional customer experience is more important than ever. FinTech companies are leading the charge by developing innovative solutions that prioritize user-friendly interfaces, convenience, and personalization. Mobile apps and online platforms now give customers instant access to a wide range of financial services, from managing bank accounts to making digital payments.

Artificial intelligence and data analytics are helping FinTech companies gain deeper insights into customer behavior, allowing them to tailor products and services to individual needs. The integration of social media and messaging platforms is also enhancing engagement, making it easier for customers to interact with their financial providers in real time. Many FinTech companies are going a step further by offering financial education resources, empowering users to make informed decisions and reduce financial stress. By focusing on customer experience and engagement, the FinTech industry is building stronger relationships, fostering brand loyalty, and driving long-term growth.

Marketing and Sales Strategies for FinTech Growth

For FinTech companies aiming to stand out in a crowded market, effective marketing and sales strategies are essential. Leveraging digital marketing channels like social media and search engine optimization helps FinTech companies reach broader audiences and boost brand visibility. Content marketing and thought leadership can position a FinTech company as an industry expert, building trust and credibility with potential clients.

Strategic partnerships and collaborations are also key, enabling FinTech companies to expand their offerings and tap into new customer segments. By harnessing the power of data analytics and machine learning, companies can gain a clearer understanding of customer preferences and behaviors, allowing for more targeted and effective marketing campaigns. Account-based marketing is another powerful tool, helping FinTech companies focus their efforts on high-value prospects and streamline the sales process. With the right mix of innovative marketing and data-driven sales strategies, FinTech companies can accelerate growth and capture new opportunities in the evolving financial services industry.

International Expansion and Globalization in FinTech

The FinTech industry is rapidly going global, with companies seeking new opportunities in emerging markets and beyond. Expanding internationally allows FinTech companies to access untapped customer bases, diversify revenue streams, and drive innovation. However, entering new regions comes with its own set of challenges, including navigating complex regulatory environments, adapting to cultural differences, and overcoming language barriers.

To succeed, many FinTech companies are forming partnerships with local businesses and leveraging cloud-based technologies to deliver financial services remotely. The rise of digital platforms makes it easier than ever to reach customers across borders, while also ensuring compliance with local regulations. Emerging markets in Africa and Asia present especially promising opportunities, as many consumers in these regions are underserved by traditional financial services. By embracing international expansion, FinTech companies can promote financial inclusion, stimulate economic growth, and secure a competitive edge in the global financial industry.

Learn more about FinTech trends within the financial services industry

The FinTech industry is characterized by pace and innovation. That's why keeping on top of the latest FinTech trends can be so difficult. Luckily, whether you're a FinTech company looking to expand, an investor looking for investment opportunities gaining traction, or are simply looking for FinTech solutions to your financial stress, FinTech trends promise to streamline the future of the financial system.

We've covered just a few of the big FinTech industry trends and FinTech products making waves in 2024. But we haven't even scratched the surface. Digital wallets, embedded finance, and alternative lending are all waiting to be explored.

So if you enjoyed this article and want to learn more, let us know! You can reach out to a representative today, or visit our blog to see what other top tips and expert insights we have on offer. Whether you're looking to generate more leads or set more appointments, our blog has everything you need to hit the ground running.