It has been a tough year for the fintech industry. Two years on from a record-breaking investment year in 2021, and a record-breaking investment decade from 2010 to 2020, fintech has been suffering an economic downturn in 2023.
As research company GlobalData states in its Thematic Intelligence: Fintech (2023) report, there are major questions around future funding rounds, valuations and the performance of individual fintech businesses going into 2024 and beyond.
Ugne Buraciene, group CEO, payabl
“As regulatory constraints are on the rise, we may not see a rollercoaster of groundbreaking technological changes in the payments industry for now, but it is precisely within these boundaries that we will make smart decisions within these rules. The potential of technologies like AI is undeniable, especially in simplifying application programming interfaces, streamlining integrations and enhancing fraud monitoring. Future technological advancements should focus on addressing legacy frameworks, particularly among established providers, while newer players benefit from agility through modern infrastructures.”
Nigel Lombard, CEO and founder, PeppercornAI
“AI will be a key theme for insurtech. It is essentially the next industrial revolution, which some fail to see, mostly due to a lack of understanding, which results in a reluctance to adopt the technology. A challenge for providers is the speed at which AI is developing. The usual, lengthy procurement process cannot be applied to a technology as rapidly changing as AI. CEOs of insurance providers need to get on the front foot or they will lag behind the competition.”
Uldis Tēraudkalns, CEO, Nexpay
“The fintech scene in 2024 is buzzing with excitement, thanks to some significant gamechanger shifts on the horizon. One of them is the blending of rules for cryptocurrencies and electronic money. Regulators are stepping up, bringing crypto under a closer watch. They are aiming to safeguard users and the financial ecosystem, much like what has been done for electronic money. With digital currencies and traditional e-money getting more intertwined, it makes perfect sense to have a unified set of rules.”
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John Barber, VP, Finacle
“What we have seen in 2023 is that GenAI is changing how banks embrace the new technology. In the financial industry, where you have massive amounts of data, a lot of customer-facing roles and an ongoing digital evolution, banking execs have an opportunity to take advantage of gen AI’s huge potential. However, there is also an understanding within the industry that tech advancements like these need strong ethical frameworks and meticulous oversight to navigate.”
Anish Kapoor, CEO, AccessPay
“As we move into 2024, authorised push payment (APP) fraud will remain high on the agenda. For payment service providers, a key focus will be implementing the new reimbursement requirements from the Payments Systems Regulator. Most businesses will not be protected by the new rules, so their focus will be on putting in place controls such as Confirmation of Payee to combat the risk of APP fraud.”
Martin Hartley, group chief commercial officer, emagine
“Digital transformation is always high on the agenda but it very much depends on the state the banks are in. I don’t think there is going to be a high volume of major digital transformation projects starting next year and, for any that do get under way, we won’t see tangible outcomes for a number of years, because these large-scale projects can take three or four years to come to fruition. With the current state of the market, I think banks are erring on the side of caution and putting any significant projects on hold. The exception is when these projects are business-critical. In these cases, of course, businesses will make decisions to ensure their survival.”
Tendü Yoğurtçu, CTO, Precisely
“Financial services has been using traditional AI techniques for many decades. Like many industries, we can expect financial technology to expand the use of AI and GenAI in 2024. In addition to common use cases for fraud detection, anti-money laundering, mitigating risk, and identifying trends and forecasting, we are likely to see increased adoption of natural language interfaces and more automation with market research, customer service and back-end compliance work. These use cases will drive focus on data, governance and cybersecurity.”
Rupert Lee-Browne, CEO and founder, Caxton
“Anti-fraud will be a major theme in 2024 as financial services businesses find themselves at the sharp end of GenAI-driven crime. Fintech companies will intensify efforts against bad actors with many solutions using AI as a counter-offensive. Relatedly, we will see a flood of login solutions, some of which will be unfit for purpose, and some of which will be amazing.”
Thomas Gillan, CEO of BR-DGE
“Moving into next year and beyond, we expect to see a transformative change in the acquiring landscape. This shift is being catalysed by established, still dominant players strategically adapting to reclaim greater market share and increase margins, which in recent times have been reduced by fintech-driven payment service providers. This transformation is not confined to the UK but globally, with acquirers looking to become a one-stop shop; reducing fragmentation in offerings and providing a frictionless experience to both merchants and consumers. To support this shift, platforms such as payment orchestration layers can be valuable strategic tools to help accelerate availability of new payment methods, enable value-added services and provide access to targeted volumes based on a range of transaction characteristics.”
Thorbjørn Fink, COO, Pleo
“2023 has been a challenging year, with businesses of all sizes feeling the pressure to hit targets and drive revenue. This is especially true for small businesses, which operate with a fraction of the resources of their larger counterparts. Looking ahead to 2024, I expect businesses to really focus on the fundamentals. One such example is in expense management – which is a typically overlooked area of a business, especially smaller ones who don’t have the resources or frameworks in place. This needs to change, as not having a clear policy can be a risky game. Businesses must ensure they have a clear expense policy in place that sets expectations for both employees and employers.”