Emerging Technology Trends in FinTech Software Development in 2024

The fintech market has grown dramatically thanks to technological advancements and regulation changes. It now provides various financial services beyond traditional banking, including purchasing investments, payments, insurance, and personal financial management.

From ease of mobile payment to automation of wealth management, digital bank solutions are revolutionizing all aspects of finance for businesses and consumers. 

So, without further ado, let us look at some of the latest trends and use cases of Fintech solutions in 2024. 

Defining the Term Fintech!

Fintech, short for financial technology, refers to integrating technology into financial services, enhancing efficiency and accessibility. 

Fintech software includes a variety of applications, such as mobile banking platforms, crowdfunded investment tools, cryptocurrency trading software, and automated advisors that make processes more user-friendly, efficient, and quick for customers. 

Fintech software development allows businesses to streamline payment processes, and improve internal business operation.

Market Statistics of Fintech Solutions

In 2021, the overall value of the fintech industry was estimated to be $135.9 billion. Because of its cost-efficiency and major impact on the banking sector, the fintech industry has seen rapid growth over the last several years. Its revenue will likely increase to over $266.9 billion in 2027.

During the COVID-19 pandemic, the fintech industry was essential to increasing the availability of financial services. Two-thirds of fintech businesses are said to have changed in various ways, including extending fee reductions, changing the qualifying standards, and loosening restrictions on payments. This move enabled fintech companies to provide innovative solutions for the evolving environment.

Trends in Fintech software development use the most advanced technology to help you make the most money. As technology continues to evolve, traditional banking and finance methods are becoming obsolete, resulting in innovative methods of offering financial services that meet today's customers' needs.

Use Cases of Fintech Solutions

As we explore the world of fintech-related software, it's essential to comprehend its many applications. For better understanding, let us discuss the various use cases of FIntech solutions in different sectors.

Investment Apps

To begin with, let's examine investment applications. Before the introduction of fintech software, investing in stocks was a complicated process involving dealing with brokers or market analysts. 

Fintech-powered investment platforms such as Robinhood or Wealthfront are now available to anybody who can invest their money with confidence without having to be a Wall Street wizard. These platforms use sophisticated algorithms to offer users specific advice that can simplify the entire investment process.

Payment Apps

The next step in our investigation of mobile banking options is payment processing solutions, another notable application for Fintech software. In the current fast-paced environment where money is time, the apps are lifesavers for large and small businesses. 

Consider PayPal, Venmo, or Square Cash, for example. They allow for quick person-to-person transfers and seamless business transactions across borders without the requirement to go through traditional bank transfer procedures.

Personal Finance

Financial management has become crucial, with more people seeking financial independence earlier in life. The good news is that fintech is available to help us again. Applications like Mint and Pocketguard aid users manage their money efficiently by keeping track of spending habits and sending instant budget alerts on their phones.

P2P Lending

In the final section, we will discuss peer-to-peer (P2P) lending, perhaps an extremely groundbreaking result of fintech's development. With P2P, lending platforms such as Prosper or LendingClub allow lenders to lend money directly to borrowers, cutting out the various cost layers traditionally connected with banks. 

This results in better terms for loans for the borrower while also generating better returns for lenders—evidence of the way fintech software can change the traditional banking system.

Emerging Trends for Fintech Software Development

Fintech software development is at the forefront of innovation, expanding the boundaries of what is possible in the financial industry. As we approach 2024, we can see that innovations in this field aren't just changing how businesses run their operations and how consumers manage their finances.

The introduction of technology in financial services has opened the way to a new era of convenience, security, and efficiency, laying the foundation for a revolution that promises to revolutionize the financial industry.

Let's explore the leading trends shaping Fintech's future developments that aren't just temporary but are helping pave the way to a different financial future.

1. Buy Now, Pay Later

BNPL is an alternative loan option that has risen to huge global recognition. According to a report by Grand View Research, the BNPL US market was valued at 1.64 billion in 2022 and is forecasted to grow with a CAGR of 24.3% from 2025 to 2030.

It is a flexible financing option that permits the purchase of products and reimburses them over the long run with no interest charges. The BNPL model has gained a lot of popularity. This type of financing is especially attractive to millennials and the X generation, who are more concerned about their finances and care about their credit scores.

BNPL also offers benefits for business owners, such as increased sales, a decrease in abandoned carts on its online shops, and more custom fintech solution development and solutions.

2. Embedded Finance

Based on an analysis by Dealroom, the market for integrated finance solutions is predicted to grow to $7.2 trillion by 2030, which is more than the total worth of fintech start-ups, the top 30 banks in the world, and insurance companies.

Embedded Finance refers to integrating finance services and products into non-financial platforms and applications that make financial functions integral to everyday experience. This trend has broken down the barriers between finance and different fields, providing users with easy access to services for financial transactions without utilizing standalone financial or banking applications. 

For various fintech companies, this increases accessibility for customers and allows them to utilize digital wallets and other payment methods that are based on fintech when making online transactions, such as savings accounts that are online.

Some examples of fintech trends are the possibility of interest-free loans when shopping online, user-friendly, one-click payment applications, and the creation of branded checking accounts and debit cards for primary customers.

3. Biometric Authentication Enhances Security

With the ever-growing threat of cyberattacks against fintech and data breaches, which will cost $4.45 million by 2023, financial institutions are constantly working on more sophisticated authorization and authentication mechanisms. Biometrics authentication remains among the best and most secure security techniques since it relies on a unique set of user information that is hard to falsify.

Fingerprint scanners, facial and vocal recognition technologies, and iris scanners used in fintech facilitate customer onboarding authentication, user authorization, verification of the payment process, and access to sensitive information. 

A variety of biometrics are frequently utilized. For instance, Revolut, HSBC, Bank of America, and other companies can log into their accounts using fingerprints or facial recognition on the mobile device of customers’ choice.

Unfortunately, the advancement of technology is a target not just for businesses but also for fraudsters. The advancement of AI has made it easier to generate fake identities, leading to an increase in fraudulent activities. Fintech companies must offer additional security layers by implementing "liveness detection" that differentiates the human consumer from AI-generated identities.

4. Contactless Technology

Fintech companies are adopting contactless technology for payments as customers seek faster and more convenient options. The widespread use of NFC technology on mobile devices, aided by big players such as Apple Pay and Google Pay, accelerates contactless payment. In 2024, we can expect the development of the trend towards contactless payments toward greater accessibility and acceptance.

Soft POS, sometimes referred to as automobile or tap-to-phone, permits retailers to use their mobile phones to accept payment via contactless. In the global market, soft POS is expected to witness a dramatic CAGR of 20.4% by 2030, resulting in an amount of $1,077 million.

5. Rise of Central Bank Digital Currencies (CBDCs)

The development of CBDC opens up new opportunities for fintech firms. CBDC opens new applications for fintech-related products and creates new areas in which fintech services are advertised. Companies should be on the lookout for the evolution of CBDC in 2024 and make adjustments to their distinctive value proposition to clients whom CBDC influences.

Central Bank Digital Currencies are digital currencies governed by central banks in specific countries. They are similar to conventional currencies and serve as legal methods for payment; however, they are in an electronic format.

CBDCs are a great way to pay for transactions and P2P transfers, investing in securities, and other financial transactions.

In addition, once CBDC is properly implemented, it will no longer be required to collect documents to establish the source of the funds.

Financial services companies in the sector should be aware that CBDCs will be one of the most significant technological trends for fintech in 2024. They should be particularly aware of the regions in which the trend is advancing and adjust their offerings accordingly.

6. Virtual Bank Cards

Virtual bank cards were created as digital alternatives to traditional credit and debit cards housed in an electronic wallet, not a physically based one. They are now being offered by neo-banks like Revolut, Monzo, Monobank, and N26, as well as established financial institutions such as Bank of America and Capital One.

The main benefit of virtual cards is the increased security. Customers can make payments in-store through NFC or online transactions without the typical risks associated with fraud on physical cards. Every transaction with virtual cards usually requires authorization from the user's banking app, allowing immediate removal and replacement of a stolen card with only two clicks.

Furthermore, certain challenger banks provide "disposable" virtual cards, which further secure transactions by changing the card's details after each use, significantly reducing the chances of fraud.

7. Robo-Advisors

The widespread use of AI tools has changed the way financial advice is provided. Investors can now get guidance on their future operations based on their business' historical background and forecasts of market conditions. AI technology, algorithms, robo-advisors, and personal financial managers have made this possible.

These technologies have evolved into an extremely profitable factor within the financial industry, helping investors in the right direction for optimal investing and spending strategies. For instance, robo-advisors such as Betterment or Wealthfront can quickly analyze huge data and adjust to market fluctuations faster than human advisors. They also offer investors the most lucrative ways to achieve their financial objectives.

Robotic automation of processes has gained popularity, particularly among new investors who cannot access conventional financial guidance. The latest investment software has dramatically reduced the hurdles to entry, allowing almost everyone to invest and possibly earn a profit with a small amount of capital.

8. Fintech Super App

The emergence of super apps for fintech is an important trend that features a variety of apps that provide diverse options to a wide population of users. These integrated solutions are disrupting the fintech industry by leveraging opportunities for innovation.

Some of the factors driving their popularity are being a convenient one-stop shop to meet fintech requirements, a large range of partners offering various services, and a mobile-first strategy to keep up with the increasing use of smartphones. Fintech super apps usually offer lower entry requirements and utilize existing platforms like social media or messaging, facilitating user onboarding. Their flexibility allows them to quickly adapt to changing user requirements and industry demands.

9. Big Data

Big Data is pivotal in finance, using huge datasets to forecast behavior and create strategies. Financial technology uses this to predict customers' behavior and perform sophisticated risk assessments, differentiating them from traditional banks. 

The anticipated benefits include improved decision-making based on structured data and insightful analytical insights derived from a variety of unstructured data sources. Other benefits include:

• Customer Insight: Big Data enables exact customer segmentation to create custom solutions.
• Secure Data: To combat digital fraud in banking, Big Data aids in creating efficient fraud detection systems that are accurate in identifying suspicious activity.
• Risk assessment: Fintech companies can perform their business with greater financial confidence as they manage cash flow effectively and provide cost-effective fees by enhancing risk assessment.
• Improved User Experience: By quickly identifying user preferences and needs, companies can provide quicker and more precise solutions, enhancing users' overall experience.

10. Regtech

Due to many regulations, banks are challenged by regulatory compliance with complicated and expensive processes. Companies must pay for legal assistance or fines for non-compliance amid complex rules. 

The growing regulatory landscape drives the demand for Regulatory Technologies (Regtech) that provide automated solutions to monitor the legality and accuracy of financial operations.

Regtech tasks include identifying clients' security, data processing, and financial risk analysis. Regtech streamlines a variety of regulatory requirements for each business segment by utilizing the automation process, Big Data, and ML integration. 

These tools examine patterns in historical data and assist in identifying troublesome situations and detecting fraudulent activities using technology for regulation.

11. Decentralized Finance (DeFi)

Following a dramatic drop in investments in decentralized finance by 2023 and 2024, we anticipate the growth of DeFi financing in 2024 and upcoming years. Fintech companies should use this opportunity to create and introduce innovative DeFi products. This will enable them to diversify their product offerings, draw more customers, and create the potential for new income streams.

DeFi, also called Decentralized Finance or a decentralized financial institution, is a different method of arranging financial transactions without intermediaries. Transactions are performed automatically using smart contracts created using distributed technology for a registry. The users control their assets by themselves, without supervision from anyone else.

Up until recently, DeFi was viewed as a relatively new technology, with many companies and clients being skeptical about its use. A growing number of users rely on Decentralized platforms because of the openness of transactions and the autonomy of the central authority.

12. Neo-Banking

The pandemic has shown us that we can do anything at home, and the financial banking sector has also taken it seriously. FinTech has been a major factor in the rise of Neo-banks. Neo-banks, which are technology-based on fintech, have similarities to traditional banks but don't possess physical branches.

Overview of Neo Banks

• Neo banks are equipped with all the characteristics of traditional branch banks. In contrast to traditional branch structures, many new FinTech companies are focusing entirely on the Neo banking model. This is a win-win solution for both the customer and the company due to the reduction in costs and accessibility to information.
• Neobanks are a kind of fintech business that exists to cut banking costs. Compared to larger banks that offer more services, they focus on these specific areas to increase the quality of their services.

13. Green Banking

More than half of all consumers are more concerned about environmental sustainability than the previous year. Sustainability is now a major factor in fintech's advancements in how consumers, investors, and other entities view companies.

Certain fintech companies and banks are already pushing forward in sustainability, with many Neobanks and payment service providers committed to ESG (Environmental, Social, and Governance) transparency. The players in this industry are creating environmentally friendly solutions and products for financial services.

Digital payments have a greener image than credit and cash. Fintech companies are implementing steps to reduce their environmental footprint. Certain banks, for example, have pledged to reach zero carbon emissions and reduce the amount of waste generated.

As customers and businesses become more aware of sustainability, fintech trends may favor financial institutions that are strongly committed to environmental and social responsibility.

14. Smart Contract

Smart contracts are an amazing FinTech innovation with wide-ranging applications within the embedded Banking, Financial, Services, and Insurance (BFSI solutions) industries. They oversee and control the execution of contracts that are electronically signed between buyers and sellers. Because the agreement is executed electronically using cryptographic keys, digital transactions do not require lawyers or paper documents.

In finance, smart contracts can be employed to automate contracts without involving a third party, such as a bank or loan officer. This means that sellers and buyers can easily sign an agreement without banks.

Future standards for smart contracts could be made possible through DeFi Fintech applications. Think about obtaining a loan. It is possible to get an installment loan using smart contracts instead of visiting banks and receiving money in 30 hours or even less.

The Key Takeaway

The future of fintech is bright, thanks to rapid technological advancements and increasing consumer demand for customized, effective financial services. By keeping up with the latest trends, tech leaders can ensure that their businesses remain at the leading edge of technological advancement.

Fintech software development can be an exciting and lucrative business opportunity for fintech, start-ups, and software development firms. However, it's a complicated and demanding procedure requiring knowledge, experience, and resources.

This is why outsourcing Fintech software development to a professional and reliable mobile app development company can be an intelligent choice. Outsourcing will help you save time and money, access a pool of competent and skilled software developers, benefit from the latest technology and advances, and help you focus on the main business goals and strategies to achieve the desired results and outcomes.

‍