Technology reshapes the world
The global financial landscape is undergoing rapid change. Nigel Green, chief executive of deVere Group, nominates six key trends that will revolutionise the way we manage our money.
The fintech ecosystem encompasses a diverse range of start-ups and established companies, and collaborations between the financial and technological sectors. Regulatory support, coupled with a tech-savvy population, has created an environment conducive to the growth and evolution of fintech solutions.
As the sector continues to gain momentum, Australia is set to position itself at the forefront of global financial innovation. Here are my six predictions for the year ahead:
1 Key role for crypto
One of the most notable developments in 2024 is likely to be the continued rise of cryptocurrencies. Over the past 12 months, Bitcoin, the world’s largest digital asset, has gained 155% in value. The trend can be expected to continue as institutional investors pile in, especially in the form of Bitcoin spot exchange traded funds, bringing with them not only capital but expertise and a huge amount of influence and credibility.
This growing acceptance of cryptocurrencies by traditional financial institutions, along with regulatory clarity in many jurisdictions, is likely to contribute to their mainstream adoption. I predict that crypto will play an increasingly important role in diversifying investment portfolios and facilitating cross-border transactions, thereby reshaping the global financial landscape.
2 Rise of central bank digital currencies
In tandem with the ascent of cryptocurrencies, central bank digital currencies (CBDCs) are set to gain ground. Several central banks around the world are exploring or developing digital currencies, aiming to modernise payment systems and enhance financial inclusion.
CBDCs offer governments greater control over monetary policy and the ability to streamline financial transactions. Additionally, these digital currencies have the potential to reduce the reliance on cash and improve the efficiency of cross-border payments.
As more central banks pilot and implement CBDCs, 2024 is expected to mark a crucial turning point in the evolution of digital currencies within the mainstream global financial system.
3 AI plays a bigger role
Artificial intelligence is a driving force behind the innovation in fintech, and I anticipate a significant increase in its usage. Fintech firms are increasingly leveraging AI to enhance customer experiences, streamline operations and make more informed decisions. From robo advisers to AI-powered chatbots, the integration of AI technologies is reshaping the way financial services are delivered.
The predictive capabilities of AI also play a vital role in fraud detection. As financial institutions grapple with the evolving nature of cyber threats, AI algorithms are becoming indispensable tools in identifying and mitigating potential risks. In 2024, the synergy between fintech and AI is expected to reach new heights, contributing to greater efficiency and innovation in the industry.
4 High demand for mobile payments
Fintech companies are likely to invest further in developing user-friendly mobile payment solutions, fostering a cashless society. The ease of mobile payments not only caters to the demands of modern consumers, it offers opportunities for financial inclusion by providing individuals in underserved regions access to digital financial services.
5 Investment in cybersecurity
As fintech continues to advance, so do the threats associated with cyber crime. In response, 2024 is expected to witness an intensified focus on cybersecurity. Fintech firms will increasingly invest in robust security measures, with an emphasis on biometric authentication methods such as fingerprint and facial recognition.
Biometrics provide an additional layer of security, enhancing user authentication and protecting sensitive financial information. By incorporating advanced biometric technologies, fintech companies aim to bolster the trust of consumers and mitigate the risks associated with identity theft and cyber attacks.
6 Focus on financial inclusion
An overarching theme for 2024 is an increased emphasis on global financial inclusion. Fintech is playing a pivotal role in extending financial services to the unbanked and underbanked populations around the world. Initiatives focused on financial inclusion are expected to gain momentum, with fintech companies leveraging innovative solutions such as mobile banking, microfinance and blockchain to bridge the gap.
The deVere Group is one of the world’s largest independent advisers of specialist global financial solutions to international, local mass affluent and high net worth clients.