In the dynamic scenario of the financial sector, it is essential to stay updated with the latest trends and developments to ensure success and continuous innovation. This year promises to be a milestone for the industry, with several emerging trends shaping the future of finance.
With the aim of offering our readers a valuable vision of what is to come, we share a detailed analysis published by Forbes Argentina, in which our CEO Julián Colombo collaborated, highlighting the main trends that will define the financial industry in 2024. We invite our readers to explore these trends and consider how they might influence their future strategies and operations.
Hyper-personalization of products, AI for fraud prevention, and the growth of digital payments will be strong in the sector this year.
The constant evolution of the financial industry and the new consumption patterns of an increasingly global and digitized society present new challenges and opportunities for banks, fintechs and insurers both in Argentina and the rest of the world. In this framework, companies in the financial sector have no alternative but to adopt the use of innovative technologies that not only make their customers’ lives easier, but also the operational efficiency and long-term stability of their businesses.
In this context, N5 – a multinational software company for the financial industry – prepared a list of the five main trends that will mark the financial industry in 2024. The survey is based on information gathered over the last year as part of the digital transformation process that the company is carrying out together with its various clients in 14 countries.
“WE LIVE IN AN EVER-CHANGING WORLD AND PLAYERS AND COMPANIES IN THE FINANCIAL INDUSTRY ARE NO EXCEPTION. AT N5 WE PROVIDE SERVICES FOR SOME OF THE LARGEST COMPANIES IN THE FIELD WORLDWIDE AND WE ARE FASCINATED TO SEE THE GREAT OPPORTUNITIES THAT OPEN UP FOR THOSE WHO ARE BEST ADAPTED TO THE USE OF NEW TECHNOLOGIES SUCH AS AI. WE ARE MOVING TOWARDS AN INCREASINGLY GLOBAL AND INTEGRATED WORLD WHERE VIRTUAL PAYMENT METHODS AND OPEN BANKING WILL BE INCREASINGLY PROTAGONISTS,” SAID JULIÁN COLOMBO, CEO AND FOUNDER OF N5.
Hyper-customization of products
The first trend identified is a rapid transformation in the way customers and businesses in the sector consume payment and financial services. This is due to a combination of new technologies (such as generative AI) and local and international regulatory advancements. Therefore, investing in services and products more tailored to customer preferences and behaviors will become one of the main issues that financial companies will need to have on the radar in 2024.
In addition, generative AI is transforming analysis and decision-making in the financial sector like never before. This tool makes it possible for banks, fintechs, traders and insurers to analyze large amounts of historical data in real time that allow them to find patterns and trends hidden in plain sight and improve predictability in a volatile market.
AI for Fraud Prevention
The use of AI as a tool for fraud prevention is an increasingly widespread trend among financial organizations and 2024 will be no different. According to global research conducted by Nvidia, among the top use cases of artificial intelligence in the financial area are payment and transaction fraud detection (31%), followed by AML (anti-money laundering) and KYC (know your customer) (23%).
The rise of generative AI
Just as traditional AI gained traction around the world, contributing enormously to innovation in the financial sector, the increasing deployment of generative AI is proving to have enormous potential to further drive the development of new financial services, by making it easier for companies to adapt to market demands. The large-scale application of this tool will significantly improve the service offering in banks, insurers and fintechs by personalizing and optimizing processes, providing more efficient experiences tailored to the individual needs of users.
Growth of digital payments
Undoubtedly, digital payment methods will continue to take hold and will have an increasing presence throughout Latin America in 2024. According to a study by the consulting firm McKinsey, the value of digital payments in the region will reach USD $2.5 trillion by 2025. This will be the trend that will gain the most momentum this year, largely underpinned by increased smartphone penetration and the growing adoption of contactless payment solutions.
AI in the Business World: Data That Describes Reality
Business leaders around the world expect 2024 to be a year of widespread deployment and adoption of Artificial Intelligence. However, they still have a long way to go: for now, 22% of companies globally and only 11% locally say they have already adopted this technology in their business operations.
The outlook is more encouraging: 28% of Argentine companies (and 32% worldwide) plan an immediate integration into some or all business units, while half of the organizations in our country (and 39% abroad) are already exploring how to implement AI in the future.
The data correspond to the 25th annual edition of the C-Suite Outlook survey, conducted by the global think tank The Conference Board (TCB) among 1,247 C-level managers – those who hold the highest positions within the organization – from the United States, Europe, Japan and Latin America.
The responses were collected between November and December 2023 with the collaboration of 10 organizations. In the Argentina chapter, 81 local senior managers participated and the data were provided through the survey team of IDEA (Institute for Business Development of Argentina).
The executives agreed that Artificial Intelligence offers very positive potential and scope in terms of productivity and efficiency, innovation and creativity, marketing and increased sales.
On the other hand, they identified that it will require some efforts: training employees and developing new skills, making investments, developing more collaborative dynamics and making adjustments in the business, among others.
