Technology drives innovative developments within the financial sector, providing the tools for fast, seamless, and secure transactions. The increasing adoption of fintech products across various industries relays the crucial need for cutting-edge solutions to meet dynamic demands. From security and payments to analytics, fintech improves accessibility to financial markets worldwide.
Fintech in Trading As It Stands
The release of MetaTrader 5 (MT5) and other trading tools marked a crucial point for adopting fintech products in financial markets. The earlier MT5 app versions had limited functions suitable for the era but gradually added more sophisticated features to meet growing demands. Today, fintech trading tools have extensive features that enhance trading analysis, data security, and performance. They are well positioned to leverage cutting-edge technologies to improve services and user experience. From AI to cloud computing and cybersecurity, here are the top trends shaping fintech in 2024.
Artificial Intelligence and Machine Learning
The adoption of Artificial Intelligence (AI) and Machine Learning (ML) is changing how fintech firms serve their clients, from enhancing trading platforms to customer services. Traders increasingly use automated strategies (expert advisors) to analyze vast amounts of data and make trading decisions based on preset instructions. Automation enhances traders’ performance by removing emotional factors and implementing personalized strategies to the letter.
ML ensures that automated tools can identify patterns and quickly assess risks, mitigate losses, and maximize profits. ML is also used for detecting fraud through real-time analysis of users’ behavior. AI and ML are also increasingly used in personal finance to track assets, investments, and budget planning. In 2024, we can expect fintech firms to leverage open-source AI projects to allow their clients to build and utilize personalized AI financial assistants.
Cybersecurity
This report states cybersecurity attacks will cost the U.S. at least $452 billion. But this is only the financial cost; the reputational damage may see businesses incur more losses in the long term, which is why cybersecurity is a priority, especially for fintech firms. In 2024, cybersecurity will shift towards the Internet of Things, authentication, zero trust, data privacy, and hardware security.
Fintech clients can expect an increased focus on robust security measures, whereas fintech firms will focus on advanced data privacy solutions and financial asset protection. We can also expect an increase in regulation and compliance; Governance, Risk, and Compliance (GRC) will be central in securing economic systems and user data. Fintech products like digital wallets and technologies like contactless payments are already shaping how cybersecurity teams protect and enhance security for the financial trading industry.
We also expect more focus on social/behavioral engineering, a fast-developing area of interest for cyber criminals seeking access to sensitive data.
Open Banking
Open banking is even more crucial to contemporary fintech products that allow interoperability and collaboration with traditional financial institutions. This innovative trend brings the deployment of open APIs to create tailored products based on clients’ needs. The entry of more fintech firms benefits traders; increased competition will likely improve the quality of products and services, competitive rates and fees, and the overall user experience. This year, we expect fintech firms to leverage blockchain, cryptocurrency, and interoperability to reach unbanked and under-banked regions and onboard new traders.
Decentralized Finance (DeFi)
Peer-to-peer (P2P) transactions — a hallmark of DeFi — are growing fast; P2P transactions grew with a CAGR of 46.8 from 2022–2023 and are expected to hit $1.4 trillion in 2024. The allure of P2P and the absence of middlemen (traditional financial institutions) are essential to fintech firms seeking to serve the growing DeFi landscape. In 2024, we expect increased P2P transactions and trading across financial markets and increased adoption of cryptocurrencies for fintech trading.
We also expect increased transparency as blockchain serves more fintech and efficiency
and stability due to decentralized nodes. The adoption of DeFi trends will also improve
accessibility to financial markets globally.
Cloud Computing, Colocation, and Storage
Over the last decade, cloud computing has dominated the internet space. Most businesses are deployed or moving to cloud systems for various reasons. Fintech trading firms leverage cloud computing and storage to provide traders with fast, reliable, and secure connections. Colocation ensures that trading firms always have servers close to their clients, which helps them manage their accounts with better efficiency.
In 2024, we expect an increase in cloud adoption as fintech companies prioritize stability
and growth. We can also expect more specific roles to gain prominence via this adoption.
For instance, fintech firms will look to hire software developers with knowledge of cloud
computing and cybersecurity.
Funding for Traders
The last calendar year saw a meteoric rise in proprietary firms providing trading capital for interested traders. We expect this trend to continue, with more structured regulations for the firms. This trend also includes firms operating various models at all levels.
Staying Ahead of Fintech Trends
Developers, traders, and fintech firms must remain ahead of market trends to get the best returns through precise early adoptions. Depending on interest, staying ahead of fintech trends might be tricky, but this is possible through extensive research and data-based information.
