NEW YORK—In a new report, Finextra has offered its forecast for the top 10 tech trends for banks and fintechs next year.
According to Finextra, those trends include:
Intelligent Automation
“Automation will continue to reshape the industry, with robotic process automation (RPA) and AI-powered intelligent automation (IA) streamlining back-office operations, reducing costs, and improving efficiency. This will free up human resources to focus on higher-value activities such as customer service and strategic planning,” Finextra said.
AI-powered Advisory and Asset Management
“AI will be used to analyze user data and provide personalized financial advice, including investment recommendations and budgeting assistance.”
Generative AI in Fintech
“Artificial intelligence will play a crucial role in tailoring financial services to individual needs and preferences,” Finextra stated. “AI-powered chatbots will deliver personalized financial advice, robo-advisors will optimize investment portfolios, and dynamic credit scoring will offer fairer and more inclusive access to credit.”
Blockchain Integration
According to Finextra, “While still in their early stages, blockchain and DLT have the potential to revolutionize various aspects of financial services, from cross-border payments and trade finance to digital identity and anti-money laundering compliance; 2024 will see further experimentation and adoption of these technologies in various use cases.”
Embedded Financial Solutions
“This trend involves the seamless integration of financial services directly into non-financial platforms. Think paying for your Uber ride within the app, or managing your investments within your favorite social media platform,” Finextra stated. “This will further blur the lines between financial and everyday activities, creating an invisible and frictionless user experience.”
Quantum Computing
“Although still in its infancy, quantum computing has the potential to disrupt the financial industry by tackling complex problems in fraud detection, risk management, and portfolio optimization,” Finextra stated. “While mainstream adoption is still years away, 2024 will see increased research and pilot projects exploring the potential of quantum computing in finance.”
Open Banking
“Open banking will continue to expand, allowing third-party providers to access financial data and develop innovative financial products and services. This will foster collaboration and competition, leading to a more diverse and dynamic financial landscape,” Finextra said.
Cybersecurity
“As cyberattacks become more sophisticated, banks and fintechs will need to invest heavily in cybersecurity measures,” according to Finextra. “This includes adopting zero-trust architecture, implementing advanced threat detection and prevention systems, and educating employees about cyber hygiene practices. We are living in an era where banking is through smartphones and most of the users do not have anti-virus on their phones.”
Sustainability aligning Gen AI and ESG with COP28
“Aligning Gen AI, ESG and COP28 goals. By aligning Gen AI and ESG, the banking and fintech industry can unlock a powerful combination for driving positive change, Finextra forecast. “This synergy can not only contribute to achieving COP28 goals but also pave the way for a more sustainable and equitable future for all.”
The Rise of Digital Currencies and Tokenization
“Digital currencies and tokenization are two different concepts within the realm of blockchain technology and finance,” the report stated. “Digital currencies are native assets of a specific blockchain network. They serve as the primary means of payment and transaction within that network.”
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