2024 in review: the key fintech trends of the year
After a year marked by major political elections, the excitement and triumphs of the Paris Olympics, and of course Taylor Swift’s record-breaking Eras tour, FinTech Futures, with insights from industry experts, reflects on the key trends that shaped the fintech landscape in 2024.
2024 has witnessed significant advancements across multiple sectors
Pay by Bank (A2A payments)
In 2024, Pay by Bank (PBB) emerged “as a credible contender to card-based payments,” writes Philip Benton, principal fintech analyst at Omdia, in a recent column for FinTech Futures.
Previously, PBB, which leverages banking rails to process payments, has “struggled to achieve mass adoption by consumers due to an inconsistent user experience,” states Benton.
However, the analyst notes that with advancements in APIs and the “growing adoption of open banking globally,” PBB is gaining traction among leading merchants, who benefit from lower processing fees compared to card payments.
Global enterprises such as JustEat, Woolworths, Ryanair, Walmart, and Lastminute.com have already embraced PBB, with the payment method gaining traction in e-commerce use cases.
And it’s not just merchants – PBB is also growing in popularity with consumers. Francesco Simoneschi, co-founder and CEO of TrueLayer, says: “Consumers have truly embraced Pay by Bank. In the UK alone, Pay by Bank transactions have tripled over the past three years, reaching 21 million in 2024.”
Moreover, the UK government is supporting this shift, reflected through its National Payments Vision published in November, which seeks to promote open banking and PBB payments by encouraging regulators to “consider its commitment to developing open banking to drive delivery of seamless account-to-account payments”.
TrueLayer’s CEO adds that regulators are now “also supporting the shift towards Pay by Bank”.
“This collective shift among merchants, consumers and regulators reflects the growing demand for better payment solutions. It’s clear that Pay by Bank is no longer just an alternative to card payments – it’s a revolution in reducing the cost of payments,” says Simoneschi.
GenAI
Throughout 2024, GenAI has continued to play a pivotal role in the financial services industry, marked by new product launches, increased investment, and broader adoption of the technology.
Globally, banks have been keen to integrate GenAI into their offerings. NatWest launched its AI-powered virtual assistant service Cora+, while Zand Bank formed a partnership last month with Alibaba Cloud and Ant Digital Technologies to “accelerate the applications of generative AI, blockchain and payment technology” in the UAE.
Moreover, Spain’s CaixaBank strengthened its focus on the technology this year, rolling out the second phase of its GenAI project, GalaxIA, aiming to speed up the tech’s deployment across the group.
Investors in 2024 have been paying a lot of attention to start-ups adopting GenAI, which has been evident through the numerous funding rounds completed this year, including Kore.ai’s $150 million round in January.
By Q3 2024, GenAI start-ups had secured over $20 billion in funding
According to a November report by S&P Global, venture capital funding for GenAI companies is on pace to outdo the impressive $22.7 billion secured in 2023. By the end of the third quarter of 2024, GenAI start-ups had reportedly already raised over $20 billion in funding.
With all this cash pouring into GenAI-focused ventures, it’s no surprise that several new companies have launched this year.
Notably, Canada’s yPilot unveiled its “banking-specific, embeddable AI” platform in June, while UK-based fintech Covecta introduced its configurable AI platform in September.
Hyper-personalisation
A major global banking trend in 2024 has been the shift towards hyper-personalisation, driven by the increased use of AI and machine learning to derive real-time insights to improve the customer experience.
The industry has recognised the importance of tailoring services to the unique needs of individual customers and the regions they reside in.
“Modern consumers want a future of finance that matches everything else in their digital lives, where financial services integrate seamlessly into their lives and keep pace with their evolving needs,” states Marcin Glogowski, SVP managing director for Europe and UK CEO at Marqeta.
“In an industry with increasingly low consumer loyalty, brands and financial institutions must go beyond traditional interactions.”
In particular, Glogowiski reveals that at Marqeta, the company is seeing trends around personalised credit offerings, such as buy now, pay later (BNPL), and rewards “booming”.
Looking ahead to 2025, Glogowiski anticipates further advancements in BNPL customisation. “We will increasingly see personalised BNPL payment plan options being offered in real-time, often within existing payment apps and products we already use daily,” he says.
For more insights on how fintech is driving hyper-personalisation, watch our interview with Lynda Clarke, chief operating officer at Tribe Payments.
In conclusion
As we head into 2025, fintech is gearing up for further innovations, with Pay by Bank, GenAI, and hyper-personalisation leading the charge in redefining the industry.
Beyond the three trends already mentioned, there was also notably a growing focus on exploring use cases for central bank digital currencies (CBDCs) and digital assets, a rising emphasis on green finance and financial inclusion, and a surge in new regtech and compliance solutions to help firms keep one step ahead of evolving cybersecurity threats and ensure compliance with new regulations.
As technology advances, financial institutions are poised to keep innovating, driving even greater disruption in the years ahead. Fintech will continue to play a pivotal role in our daily lives, and 2025 promises to be just as exciting for the industry.
