Fintech and AI in 2024: moving beyond the buzzword
Fintechs will be forced to move beyond the initial hype of artificial intelligence this year
AI was the unavoidable buzzword of 2023, and it looks set to hold that crown again this year.
Other topics will ebb in and out of view — I’m predicting M&A, all levels of embedded finance and a lot of regulation talk — but lurking in the background AI will be ticking away.
That will hopefully be the difference between last year and this year.
AI dominated the headlines in 2023 and we saw a flurry of companies jump on the bandwagon of adding ‘AI’ to their names, with investors flocking and valuations skyrocketing.
Everyone was shouting loudly and proudly about a new ChatGPT integration or revolutionary use of technology, but artificial intelligence was far from a new concept for fintechs last year.
In 2024, the companies that managed to create a truly useful product or system will remain, while those that just picked up the word won’t be able to sustain themselves.
Before ChatGPT hit the scene, companies had been using large language models to automate processes for years, consumer fintechs were using generative AI to help personalise customer interactions and many had long ago introduced AI to their backend processes.
This year, while the sheen of AI won’t fade completely, it will have dulled enough to become background news — everyone will be using it, but that won’t be groundbreaking.
Fintechs will continue to find new and creative ways to use AI as it evolves faster than they can even keep up with, likely with a view to scaling and improving backend operations more than too much outward-facing innovation just yet.
Incumbents will, once again, be forced to kick it up a gear if they want to stay in line with their fintech competitors, and this could be a struggle for some.
While the older players in the game have an edge over their younger opponents in terms of money and resources, their more cumbersome processes could hinder their abilities to innovate at the same speed.
New startups could have an edge in integrating the technology from the get-go, but it won’t be enough to just say you’re using AI in some vague way for the sake of it.
AI will integrate into all things fintech in 2024, so it will be a matter of who can keep pace and separate what is useful from what looks, or sounds, shiny and new.