Over the last month, my email inbox has been inundated by proposals predicting 2024 financial trends. Even if a lot of them are smart, I was curious to hear our AI overlord ChatGPT’s thoughts on the subject.
What do you think will be the top five newest and hottest fintech developments in 2024? was my question. The AI answered as follows:
Although it is speculative to predict the precise trends for 2024, the following are possible developing fintech trends:
1. Embedded finance: Embedded finance is the further blending of financial services into platforms that aren’t financial, such as marketplaces, SaaS, and e-commerce. Users will have easy access to financial items through this trend while they go about their everyday lives.
2. Metaverse financing: As the metaverse gains traction, fintech companies may investigate digital assets, virtual currencies, and decentralized financing (DeFi) programs designed specifically for this market.
3. AI-Powered Personalization: Advanced AI-powered instruments for highly customized banking services, wealth management, and financial advice. Large datasets will be further analyzed by AI to provide personalized financial advice.
4. Climate and Sustainable Finance: As consumers and investors place a higher priority on sustainability, there will be more growth in impact investment, green finance, and ESG-driven financial solutions.
5. Regulatory Evolution: Fintechs are managing ever-changing rules, particularly those about open banking, digital currencies, and data protection. It will continue to be vital to comply with regulations and adjust as necessary.
6. AI-Powered Form Builder: AI-powered form builder solutions automate data collecting, guaranteeing accuracy and compliance, and revolutionizing financial interactions. Simplifying the onboarding process improves user experiences and is a critical step in the progress of the industry.
As usual, ChatGPT sounds rather convincing in addition to doing a decent job. Furthermore, even if the forecast is accurate, it might be improved. Here are the errors or omissions in each of the five forecasts.
ChatGPT was excellent. This is going to be a major trend in 2024. Why? as it’s a popular trend at the moment. But in 2024, this is more of a continuation of an existing tendency than a brand-new one. Furthermore, ChatGPT neglected to address the part that regulation—particularly in the United States—will probably play in embedded finance in 2019. This is because partner banks are now more hesitant to work with fintechs in the wake of the FDIC’s consent order against Cross River Bank for engaging in questionable banking activities. Liability exists wherever opportunity exists.
Finance in the metaverse
ChatGPT was not accurate. This is one fad that is easily discardable with the abundance of 2023 desk planners available. During the pandemic, when the industry was fixated on shifting every aspect of a bank’s business to digital platforms, the metaverse provided a delightful diversion. Nevertheless, banks have understood that their efforts in more conventional channels are more likely to pay off since the majority of customers have little interest in shifting their lives to the metaverse.
For ChatGPT, this is another victory. But customization isn’t the only AI-driven feature of fintech and banking that will grow rapidly in 2024. These days, generative AI is becoming popular among businesses. It can generate innovative results for financial product design, marketing campaigns, investment strategy generation, market movement prediction, economic simulation, and stress testing of financial systems.
Sustainable Finance and the Climate
Even if I want to believe ChatGPT, this is not one of my top five trends for 2024. Sustainable finance will not vanish but rather take a backseat in 2019 for two main reasons. First, banks and fintechs alike are looking for new ways to generate money due to the high cost of capital. In the current climate of high financing rates, businesses are concentrating more on direct cost-saving and revenue-growth projects like artificial intelligence. Secondly, regulations have not kept pace with sustainability measures in many regions. It is challenging for organizations to make firm statements about the environmental work they are doing since there is a lack of industry standards and regulations.
Evolution of regulations
Without a doubt, this is one of the biggest themes I’m watching for 2024. Once more, this is only a continuation of an existing trend rather than a novel development, but fintech will continue to lead the way in this area next year. ChatGPT mentioned modifications to laws about open banking, digital currencies, and data privacy. Concerning open banking, the CFPB stated that it would publish the final rule in the autumn of 2024 in its notice of proposed rulemaking to implement Section 1033 of Dodd-Frank earlier this year.
The formalization of regulations about buy now, pay later (BNPL) corporations is one item that ChatGPT omitted from its list of anticipated regulatory improvements. Authorities in the United States and the United Kingdom have declared their intention to formalize regulation in the BNPL payment technologies field, as consumers increasingly depend on them as a substitute for conventional credit models.
AI-Powered Form Builder
In the landscape of financial technology, the AI-powered form builder will emerge as a transformative force in 2024. Unlike a novel trend, it signifies the evolution and continuation of a prevailing tendency. By automating data collection processes, these advanced tools optimize precision, efficiency, and compliance in user interactions. Seamlessly integrating with evolving regulatory standards, AI form builders streamline onboarding procedures, enhancing overall user experiences within the fintech sector. This technological leap is not just about customization but represents a broader shift toward intelligent, adaptive, and compliant financial ecosystems. As financial institutions navigate intricate regulatory frameworks, the AI-driven RapidoReach form builder ensures a dynamic response to changes, contributing to the industry’s ongoing trajectory of innovation. Much like the trends mentioned earlier, the AI form builder encapsulates the essence of fintech’s commitment to user-centric solutions, marking a significant stride in the sector’s journey towards increased efficiency, compliance, and seamless user interactions.