Fastest growing FinTech trends in UK 2024

In the age of innovation, staying current with technological advances is not just beneficial; it’s crucial.

Fintech has an opportunity for sustained expansion thanks to innovations like open banking, blockchain, and artificial intelligence. Looking ahead, it is clear that these trends will keep influencing the financial landscape. Multiple tech trends will impact the finance sector, from embedded payments to SaaS services.

This blog will look at the top emerging fintech trends 2024 that define the financial services landscape in the coming year.

Table of content

Top Emerging finTech trends to look out for in 2024

1. Blockchain technology

Blockchain integration increases efficiency, security, trust, and transparency in financial systems, processes, and products.

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For example, adopting blockchain integration can make smart contracts common; these streamline complex transactions while ensuring compliance with defined rules. Decentralised finance (DeFi) may also be enabled via blockchain integration, developing open systems without intermediaries, which enables faster execution times at lower expenses.

This creative approach could even tokenise assets like real estate properties, turning them into tradable digital tokens that can readily be transacted through distributed ledgers, leading to enhanced liquidity & flexibility across markets globally!

2. Embedded finance

Incorporating financial offerings into non-financial sites like e-commerce, social networking, or health care is called embedded finance. This strategy seeks to increase customer loyalty and generate new revenue streams for these platforms by providing customers with seamless, customised, and personalised financial solutions.

For example, a healthcare platform can provide funding or insurance and an online marketplace can offer payment plans or financing choices.

3. Open banking

It is a financial tech that gives users more flexibility and control over their finances by enabling them to safely share their financial information with third parties. It provides ease for consumers and opportunities for companies to access emerging markets, create innovative goods and services and improve productivity through data exchange.

Open banking unlocks numerous opportunities for financial institutions, payment providers and other fintech firms looking to leverage the potential of customer information.

Through open banking, consumers have more control over where they maintain their financial information while also being able to quickly transfer it between various companies or enable third-party providers access to their information when necessary.

Open banking can change how individuals handle money and communicate with financial organisations since it offers unprecedented transparency, choice, and control.

4. Buy now, pay later (BNPL)

The BNPL trend enables customers to buy goods and services and pay for them in instalments. Recently, BNPL services have grown in popularity, particularly with younger customers.

While BNPL improves accessibility and credit history for customers, it’s important to adhere to payment deadlines.

5. Alternative lending (or P2P lending)

As a fintech trend, alternative lending describes unconventional lending models and platforms that offer credit availability outside traditional banks. It includes online lending marketplaces, crowdfunding, and peer-to-peer lending.

Market research indicates that by 2026, the alternative lending sector is expected to expand significantly. Technological developments, the growing need for quick credit, and the capacity of alternative lenders to assist underprivileged or unnoticed borrowers are some of the factors propelling this growth.

6. Artificial intelligence and machine learning

Fintech businesses employ AI and ML to boost the effectiveness and precision of various financial services, including risk assessment, fraud detection, and customised financial advice. For instance, chatbots with AI capabilities make financial and customer service inquiries easier.

Due to these technologies, businesses can reduce expenses, increase productivity, and provide customised solutions. However, addressing concerns about algorithmic fairness, security, and data privacy is necessary.

7. Cybersecurity

Cybersecurity is one of the biggest trends in fintech for financial businesses, as cybercriminals can target them. Fintech businesses make significant investments in cybersecurity to safeguard their clients’ financial assets and data. For instance, some businesses utilise artificial intelligence to identify and prevent fraud.

To prevent fraud and financial losses, cybersecurity measures must be continuously improved and funded to keep up with cybercriminals.

8. IoT

IoT allows physical devices connected online to gather data, process it, and take action without human intervention. Fintech has much to gain from this because IoT has improved banking’s efficiency, security, and convenience.

Financial institutions can monitor customer behaviour using sensors built into their products. These sensors can automate responses based on predefined preferences or behaviours, such as automatic payments in response to changes in the customer’s spending patterns or fraud detection algorithms.

Furthermore, voice recognition technology is used for authentication, streamlining login procedures and enhancing security by increasing the difficulty of hacking accounts.

9. SaaS

Software as a service, or SaaS, is another emerging trend to be aware of in 2024. Businesses can pay for and use cloud-hosted software programs without having to install them on their computers or servers using SaaS services.

Doing this removes many related overhead expenses, freeing up resources for businesses to concentrate on creating great customer experiences.

Furthermore, utilising SaaS gives you access to strong tools with improved security protocols for managing and storing data. It would be costly or difficult for individual businesses to implement independently.

10. Green finance and sustainable investments

The UK’s FinTech landscape will notably shift 2024 toward sustainable investments and green finance. A major factor in changing the financial landscape with a focus on Environmental, Social, and Governance criteria is the rise in global concerns about climate change brought about by FinTech platforms.

This trend is manifested by the increasing number of green bonds and dedicated sustainable investment platforms, enabling investors to align their financial objectives with eco-friendly choices.

The role of FinTech in advancing corporate social responsibility has grown, encouraging companies to integrate sustainable practices into their daily operations.

At the same time, regulations and guidelines are changing to encourage and assist sustainable finance projects. Green finance ideas are being incorporated into FinTech platforms as part of a larger effort to address environmental issues and promote more ethical investing practices, which benefits financial portfolios and the environment.

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Final thoughts

The changing trends in fintech in the UK in 2024 are prime examples of creativity and flexibility. However, knowing which trends have the greatest potential to affect your company is crucial before embracing them all.

Overcommitting can lead to financial waste and confusion. Consider each trend’s potential benefits for your company and develop a plan of action accordingly.

Not every trend will be appropriate or practical for your company to embrace, but some will be a perfect fit.

123Financials Editorial Team
The 123Financials editorial team is composed of seasoned finance and accounting experts with a combined experience of over 20 years. Specializing in UK finance, accounting, and tax-related content, our team is dedicated to delivering insightful and practical advice to startups and small businesses. With a strong background in both the theoretical and practical aspects of financial management, we ensure that our readers stay informed and empowered to make sound financial decisions. Whether it’s navigating the complexities of UK tax laws or providing strategic financial planning tips, our team is committed to excellence and accuracy in every article.