Finance and technology. Two (apparently) very distant spheres which have been colliding in a sole entity since 2016, the year that many are stating as “the rise of fintech“. Given its mysterious (still) and yet very embryonic nature, fintech has been exhaustively covered under many points of view, ranging from a strictly technological one to a very business-related one. Although very looked after, the matter is indeed extremely divided: startups, who are generally covering the above-mentioned technological development within the field and triple-A companies, who are approaching them in terms of investments in order to acquire the exclusivity for their tools. Let’s analyse the technological rise of startups within fintech, the (most likely) biggest business segment of 2024.
Understanding The Architecture First
Fintech is very broad as a subject: there are many ways to describe how technology is impacting the financial world and, technically, they’re all pretty much correct. On the other hand, from a technological point of view, fintech has been quickly rising within the machine learning of things: automation within big data optimisation and processing is a massive player within the fintech realm, as most of the banking-related tools which are related to investments, mortgages and loans, in general, have some sort of form which you must fill in order to get your desired loan. By using machine learning algorithms, certain tools are able to automatically track your credit history and give the broker a proper projection on the person’s eligibility, which is a massive thing, given the fact that it speeds up the entire analysis process. The best form of big data processing within the finance world is definitely used by Paypal, with their (relatively) new Paypal Credit.
Combining AI To Data Regulation
Given last year’s GDPR, data regulation and its processing must be covered in detail and this, of course, happened to impact the financial world, especially (yet again) within the loaning part of the matter. Given the fact that both the figure of the processor and the regulator are required for such law, having a “virtual” version of such personalities is definitely quite helpful, and that’s exactly when AI comes to help as it provides a virtualized version of such figures, working 24/7 in order to properly process and store such data.
This is definitely a groundbreaking point and is very likely to be adopted as an industry standard by all the companies who are heavily relying on data processing. Currently, the entire AI field is pretty much startup dominated, given the fact that, although very looked after by many Silicon Valley players, is still quite embryonic. 2024 will definitely be massive for what concerns the matter, which is why this sector should be monitored by everyone who’s trying to invest within the matter.
Blockchain And Cryptocurrencies
Yes, cryptocurrencies are still a thing, apparently. Although in 2024 Bitcoin dropped a lot in value, the crypto boom is still peaking within the IoT and it’s definitely growing in terms of topic’s awareness. Blockchain, in fact, has been covered by many banks and financial providers in January 2024, with a common statement: “It’s important to apply and research into methods which could be implemented in our day-to-day routine when it comes to blockchain-based applications”. In fact, blockchain and its crypto-side are currently a pretty high priority in development teams such as Santander’s and Nat West’s. A bold statement of the fact that blockchain as a whole will definitely impact our financial decisions in the nearest future.
Startups And Web Development
Finance is moving towards a very passive, not-physically based approach in terms of customers service. In fact, online portals which are providing services ranging from mortgages to open bridging loans have taken places and are, in fact, going to replace the old “corporate” setups which we’ve been used to. Of course, applications are regulated by the above-mentioned tools which automatically learn and decide if the user is suitable for such application. This is possibly the most covered part of the fintech realm within the startup field, as it actually gives us an insight on how website-based the whole matter will be in the following years, which is quite important and has been confirmed by many industry analysts.
The Market Value
Although the fintech business sector has been valued at around $2 billion, the entire market value is currently based on projections and, therefore, all these data should be taken accordingly to this. In fact, startups who recently received waves of investments are still quite far away from being fully developed, both from a strictly technological and business-related point of view. With this in mind, the next couple of years will definitely be pivotal for what concerns fintech’s development as a whole, especially since (as said above) companies like Paypal have seen a net increase in terms of funds and income with the application of fintech-related business growth plans.
The Employment-Side Of Things
Of course, the first decisive factor when it comes to new business segments would be related to the employment side of things, which are indeed growing within the matter: data scientists as a whole have grown by 300% during the last semester, a confirmation of the fact that big data processing is indeed required within this business sector. This is definitely important for what concerns the understanding and, most importantly, the future of fintech, given the fact that such employers will build the foundation for the future of such business segment.
To Conclude
Fintech is definitely at a very embryonic stage and therefore it’s quite easy to understand why startups are ruling the entire market segment. As mentioned above, the next couple of years (and also this one) will definitely be crucial in terms of development and market growth for what concerns this segment. We’ll definitely see a far bigger wave on investments during the second half of this 2024, given the fact that many banks and financial providers are approaching online financing just like Paypal did. With this in mind, the future of fintech is brighter than ever.
Paul Matthews is a Manchester based business and tech writer who writes in order to better inform business owners on how to run a successful business. You can usually find him at the local library or browsing Forbes’ latest pieces.