Omolabake Fasogbon
The evolution of technology has continued to pave way for innovations and engagement across different sectors. The gains are massive to humans, organisations and economies. In the financial sector, technology is revolutionising monetary transactions, thus creating a world of new opportunities in the financial technology (fintech) sub-sector.
The breakthroughs in fintech, including mobile payment, digital lending, and blockchain have beem fruitful far beyond financial inclusion growth.
Like technology, fintech too is evolving which according to pundits translates to more progress for mankind. Meaning that financial inclusion will be deepened, more and more persons will be financially independent through new employment opportunities, while companies and individuals can boast of enhanced productivity.
And with Fintech Digital Investment market in Nigeria expected to hit $13.70 billion in 2027, according to Statista, experts believe that it is a sector for investors, whether big or small to explore in 2024.
Although, the sector has had its fair share of the market, Reuters says projected higher interest rates, inflation, and greater investor scrutiny are incentives for fintech in the coming year.
Culled from a fintech app, NowNow, below are some trends to shape fintech in 2024. They are new opportunity baits for investors.
Decentralised Finance (DeFi) Maturation
Decentralised Finance, DeFis ‘ prominence is set to grow even further in 2024. The platforms leverage blockchain technology to provide traditional financial services like lending, borrowing, and trading without the need for traditional intermediaries. Likewise, as the platforms mature, they expect that they would spur increased security, improved user interfaces, and a broader array of financial products within the DeFi ecosystem.
Central Bank Digital Currencies (CBDCs)
Central banks worldwide are actively exploring the implementation of digital currencies. It is thus anticipated that in 2024, there would be significant acceleration in the development and deployment of Central Bank Digital Currencies (CBDCs). These digital representations of national currencies aim to enhance financial inclusion, reduce transaction costs, and provide central banks with new tools for monetary policy.
Artificial Intelligence (AI) Integration
With artificial intelligence, growth, it is also expected to see increased integration of AI in areas such as fraud detection, customer service, and personalised financial advice. In 2024 too, it is hoped that machine learning algorithms would become more sophisticated, enhancing efficiency and accuracy across financial processes.
Green Fintech and Sustainable Investing
Environmental, Social, and Governance (ESG) considerations are gaining prominence in the financial world. There is likely to be a surge in Green Fintech initiatives that leverage technology to promote sustainability. This includes the rise of fintech platforms facilitating sustainable investing, carbon footprint tracking, and the integration of ESG criteria into financial decision-making processes.
NFTs and Digital Asset Management
In 2024, non-fungible tokens (NFTs) are likely to make waves in finance. Hence, fintech platforms may explore the use of NFTs for tokenising real-world assets, creating new opportunities for fractional ownership and enhancing liquidity in traditionally illiquid markets.
Open Banking Expansion
Equally important, open banking, which allows third-party financial service providers to access consumer financial information through APIs, is set to expand further in 2024. This trend promotes competition, fosters innovation, and provides consumers with more control over their financial data. The open banking platforms will also see to the birth of range of financial services.
