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12 Fintech Predictions for 2024

The fintech industry is ever-changing. The way we view and approach finance is evolving, as is technology. It’s up to us to see those changes and use them to our advantage — and to innovate. We tapped Connor Coughlin and John Stuart at Apex Fintech Solutions to share some of the observations they’ve made of late, and to shed some light on predictions for the future of fintech based on what they’ve learned. Will we see these fintech predictions come to light in 2024? Only time will tell.

The Rise of Paid Subscribers

Consumers got used to “free” through the pandemic, from budgeting apps to banking apps to investing apps and more. As the tide washes out on the number of contenders, the highest quality competition will remain and services will focus on sustainability. Consumers will have to, and be willing to, pay fair prices for services. Free is not always better, and they’ll get a better experience going forward because the providers will be able to invest in themselves.

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A Turn to Investment Assistance

Consumers have realized trading alone is hard, advice is “back in fashion”, and consumers are arming themselves for an economic slowdown. We will continue to see savings flow into managed investment models, yield-producing, and principal protected products.

A New Kind of Hybrid Model

Better tools, products, and advice for more people. The debate over robo vs. human advice has instead become a harmony between the two: Technology to do what it does best and humans to do what they do best — working together for a great customer experience. AI will steadily get introduced into this harmony, creating not only better experiences but also further efficiencies and lower barriers to entry for the best advice. This introduction of technology into the heart of wealth management means the people who need advice most are able to access it at a fair price.

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New Experiences and Strategy from Incumbents

Incumbents are going to step up competition with fintech challengers. Incumbents move slower, but they are smart and see what is happening around them. The velocity at which they are refreshing their user experiences and products to closer match best in class is increasing. Especially as valuations come down and struggling tech companies look for strategic acquirers.

A Push to Innovate and Futureproof

Infrastructure refresh — banks, brokers, insurers, lenders, and more have been running on decades old technology for too long. The initial fintech revolution has been focused on obfuscating an outdated infrastructure with sleek front ends and many workarounds to simulate real-time. As direct-to-consumer investment capital dries up and the most successful platforms struggle to scale using workarounds, you’ll see the back-end infrastructure of the financial landscape leapfrog decades into the future.

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A New Avenue for Retail Investors

Savvy high net worth investors today often use their investment portfolios to access margin, credit, and creative ways to collateralize their portfolios. Retail investors have not been provided the tools to really leverage their own portfolios for everyday loans and access to credit. 2024 will start to see fintech’s enabling the retail investor to access everyday loan opportunities and credit that are backed by the holdings in one’s portfolio that often have a lower interest rate than traditional margin or bank loans.

Investments as an Entry Point to Deals and Rewards

A lot of people’s personal balance sheets, such as bank accounts, loans, and credit cards are used for financial institutions to cross sell additional products to the customer. The stocks held in the customers investment portfolio have traditionally not been used by brands and merchants directly for marketing, reward points, and offers. The office of the CMO at larger public brands will start to build campaigns around their shareholders, creating a real relationship between the brand and the end-investor that holds their stock creating loyalty and exclusive access for investors that continue to believe in the brands they buy every day.

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More Attention on Fixed Income

As interest rates continue to be attractive for low-risk returns, the ability for retail investors to educate themselves on the world of fixed income, evaluate investment opportunities, and seamlessly buy/sell the fixed income asset class will be as available as buying stock. This includes whole bonds as well as fractional bonds to lower the barrier of entry from a cost perspective.

Hands-Off Investments

The term “AI-RIA” will start to become a menu option for retail investors. Algorithmic trading and complex rules around buying/selling have traditionally been available only to larger trading enterprises. The convergence of large language models to help assist and automate an investor’s wants and needs in a portfolio will become easily available to everyone in a more automated fashion. The AI-RIA will start to offer a “set-it and forget” style investment option, managed by simple rules the end-investor will control themselves.

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AI Tax Strategies

Robo-style tax software for the retail investor that recommends tax strategies from a total net worth perspective will start to get cheaper and more available as a CPA assistant that operates in the background of your life. Retirement contributions, wash sales, costs basis analysis, and more advanced tax recommendations will help the retail, side-hustle type investor across their entire investment footprint.

Options Turned into Side Hustles

Investing into options is complicated and requires an investor to have continual oversight of a portfolio to manage contracts and risk. Retail option platforms are making this easier to simply generate “passive income” from selling basic contracts on investments a retail investor already owns. The total return of a portfolio will start to become common language, taking into account not only the growth of a stock but the income it can generate by selling contracts against the portfolio in an easy-to-understand way. This passive income from options will start to become synonymous with the passive income young investors derive from side hustle gigs.

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Solutions Engineering for Embedded Finance

Fintech companies are great at building products and user experiences but as more and more enterprises want to leverage this “entrepreneurial” fintech culture as a partnership, B2B fintech platforms need to be surgical at providing value to large organizations beyond an out of the box product. The ability of fintech platforms to understand a problem and customize solutions for larger enterprises will be a major factor in the success of embedded B2B fintech platforms. 2024 will start to see the importance of sales engineering when it comes to attracting and winning new clients.

We look forward to watching the fintech industry and markets in 2024 to see how spot-on the Apex team was in their predictions. If you’re interested in joining us as we continue to push fintech forward, check out our PEAK6 open positions.

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