Key trends shaping the future of finance at ’24 Fintech

The inaugural 24 Fintech summit, a groundbreaking financial services-focused event in Saudi Arabia, is set to bring top government officials and global finance leaders together, to address critical issues shaping the future of the industry. 

Key topics on the agenda include governance, risk and policy, cybersecurity, global interoperability, and innovations in payment systems.

As Saudi Arabia’s fintech sector rapidly evolves, now accounting for nearly 20 per cent of all venture investments in the kingdom, the event will serve as a crucial platform for discussing the latest trends, challenges, and opportunities. 

Here’s a look at the key trends that will be highlighted at the event:

1. Digital-first future

The shift towards a digital-first approach is revolutionising financial services globally. 

In 2023, digital payments in the Middle East and North Africa (MENA) region grew by 19 per cent, with the market expected to reach $200bn by 2026. This trend underscores the growing importance of digital technology in enhancing financial inclusion and accessibility.

2. Direct access to payment systems

Cross-border payment systems remain a significant challenge, with global remittance costs averaging 6.3 per cent in Q1 2024. The event will explore the key barriers in payments and how fintech companies can reduce these costs. In the MENA region, cross-border payments are forecasted to grow by 12 per cent annually, reaching $55bn by 2025.

Additionally, Saudi Arabia is ranked third globally in remittance outflows, with SAR144bn ($38.4bn) sent abroad in 2023 alone.

3. Balancing innovation and regulation

As the fintech market continues to grow at a projected CAGR of 25 per cent from 2023 to 2028, reaching $310bn, the role of central banks in regulating fintech becomes increasingly crucial. 

Discussions at the event will focus on how regulatory frameworks can balance fostering innovation while ensuring financial stability, particularly in emerging markets like Saudi Arabia.

4. Saudi Arabia’s AI strategy in finance

Saudi Arabia is making significant investments in artificial intelligence (AI), aiming to become a global leader in AI by 2030. The kingdom’s AI market is expected to grow by 35 per cent annually, contributing $135bn to the economy by 2030. 

Various speakers at ‘24 Fintech will delve into how this AI strategy is transforming the financial sector, particularly in areas such as risk management and customer service automation.

5. The evolution of payment landscapes

The global Buy Now, Pay Later (BNPL) market is set to reach $1.2tn by 2027, with a CAGR of 28 per cent. In the MENA region, the BNPL market was valued at $9bn in 2022 and is projected to reach $146.19bn by 2032, growing at a CAGR of 32.20 per cent from 2023 to 2032. 

This growth presents a significant opportunity in a region where card usage is underutilised, and e-commerce adoption is rapidly increasing.

6. Resilience in fintech regulation

Fintech startups must navigate complex regulatory environments to attract investment. In 2023, global fintech investment reached $75bn, with the MENA region accounting for $3bn. 

The event will focus on strategies for startups to thrive in this challenging landscape, particularly in Saudi Arabia, where fintech investment is expected to grow by 15 per cent annually.

7. Capital markets and venture capital

The digital transformation of capital markets is accelerating, with the global digital assets market projected to reach $23bn by 2025. 

Saudi Arabia’s Vision 2030 has spurred a surge in venture capital, with fintech emerging as a major beneficiary. 

In 2023, venture capital funding in Saudi Arabia’s fintech sector grew by 60 per cent, reaching $500m, with fintech leading investor transactions in H1 2024.

8. Cybersecurity

As the fintech industry faces increasing cyber threats, cybersecurity spending is expected to reach $45bn globally by 2026. Various discussions around fintech resilience will address strategies for mitigating risks such as ransomware and blockchain exploits, particularly as the MENA region experiences a 25 per cent increase in cyberattacks targeting financial institutions.

This innovation bridges the gap between conventional banking and the digital finance world, offering a more efficient way to manage and transfer assets.

Meanwhile, central bank digital currencies (CBDCs) and stablecoins are also key developments in the fintech space. Over 130 countries are experimenting with CBDCs, seeking to modernise payments and enhance financial inclusion. 

Furthermore, stablecoins, which aim to reduce cryptocurrency volatility by anchoring their value to stable assets, play a critical role in the emerging digital ecosystem.

These trends highlight the dynamic nature of the fintech industry and the importance of staying ahead in a rapidly evolving financial landscape.

The ’24 Fintech event, scheduled for September 3-5, 2024, promises to be a must-attend gathering for industry leaders, investors, and innovators shaping the future of finance.

Read: Inaugural ’24 Fintech’ edition to host global finance industry leaders