The year 2024 presented a mix of challenges and opportunities for the fintech industry, marked by cautious investment trends and evolving priorities. According to KPMG’s Pulse of Fintech, global investment in the sector dropped to $51.9 billion in the first half of the year, the lowest six-month total since 2020. This decline reflects investor wariness amid high-interest rates and geopolitical uncertainties.
Despite the overall slowdown, payments continued to dominate funding, drawing $21.4 billion globally. Regtech emerged as a rare bright spot, surpassing its 2023 investment total with $5.3 billion in the first half of the year. Additionally, AI remained a focal point for investors, valued for its ability to enhance efficiencies and reduce costs in a competitive, high-cost environment.
The industry showed resilience by adapting to shifting priorities. Partnerships between fintechs and traditional financial institutions gained traction, driven by the need to navigate regulatory complexities and meet evolving consumer demands. Fintechs also played a pivotal role in expanding access to financial services, supporting underserved communities, and promoting financial resilience.
Nevertheless, challenges persisted. The push for sustainability-driven innovation remained strong, as did the need to address critical risks such as data privacy and financial crime.
As 2024 comes to a close, December provides an opportunity to reflect on the lessons learned throughout the year. The focus now shifts to the strategies and innovations that will shape the future of fintech, ensuring the industry continues to evolve in response to global economic and societal demands. Despite a cautious investment climate, fintech remains at the forefront of driving inclusivity and resilience in financial services.
