During a recent conversation at Money20/20, Katelyn McCarthy, VP of strategy and business development at Discover® Global Network, and Jordan McKee, research director for the fintech practice at S&P Global Market Intelligence, gave valuable insights into the current state of the fintech industry, including trends, critical success factors, and projections for 2024.
- There is a growing trend towards digital payments, with a majority of consumers now favoring or expecting to use digital payment solutions. The industry is focusing on creating frictionless payment experiences that translate seamlessly into physical and omnichannel settings.
- Successful fintechs in 2024 will need to be adaptable and able to adjust their business models to tap into current opportunities and navigate challenges. Strategic partnerships, with vendors and ecosystem collaborators, will be crucial for industry growth and fintech success.
- A notable shift is expected in venture capital investments towards fintech infrastructure, going from user-friendly financial services to essential components like spend management, treasury management, vaulting, and compliance.
- Some of the predicted challenges that fintechs will face include rising capital costs, funding constraints, and stricter regulatory requirements.
McCarthy emphasized the importance of partnerships, stating they serve as a driver for expansion, customer acquisition, and cost reduction. With a rising readiness among fintechs to collaborate, new directions for innovation are emerging.
Another key point made by McKee was the noticeably changing trend in venture capital investments. The focus is shifting towards fintech infrastructure, which he sees as large opportunities in their own right. The areas they are targeting include spend management, treasury management, vaulting, risk, and compliance, which are less glamorous but essential parts of the fintech industry.
McCarthy also highlighted the macroeconomic factors that fintechs will need to manage in 2024. These challenges include increased capital costs, funding restrictions, and strict regulatory requirements. As the fintech industry continues to forge new paths, digital payments, strategic partnerships, and infrastructure development will keep leading the way. Adaptability, collaboration, and an in-depth understanding of market trends will be critical for thriving in this evolving landscape.
Watch the full interview and learn more about their insights for fintech success in the upcoming years.
