Finance Monthly. The Monthly Round-Up 14 2024 FINTECH PREDICTIONS: AI BUBBLE TO BURST, QR PAYMENTS TO EXPLODE, RECKONINGS FOR REGULATORS Data-driven core banking engine SaaScada, today released its predictions for 2024, offering insights for the financial services (FS) industry: Fintech’s AI bubble will pop Nelson Wootton, CEO and Co-Founder, SaaScada “Klarna’s declaration that they’re going ‘all-in’ on AI represents the mood of the financial services industry, with even legacy financial and banking players touting AI capabilities in their future offerings. “Next year, however, executives and investors are going to wake up to an ugly truth: most banks are years away from having the data needed to train and deploy effective generative AI models. Most deployed AI solutions in finance are repackaged old tech, and these can’t hope to meet the sky-high expectations set in 2023. This will mean, in 2024, fintech’s AI bubble is going to pop.” The battle between card and QR payments will heat up in Europe Steve Round, Co-Founder, SaaScada “More European banks will ramp up QR payment offerings in 2024, cutting out card payment rails like Visa and MasterCard to save on associated costs. Next year, we should expect card providers to start pursuing legal action to protect their positions, and they may even threaten banks with abrupt removal of their card facilities. To better compete against card providers, banks may investigate more robust consumer protection for QR payments – such as the right to chargebacks and refunds consumers have with credit card purchases.” We’ll see if Consumer Duty has any teeth Nelson Wootton, CEO and Co-Founder, SaaScada “We’ve yet to hear of the FCA making any high profile attempts at enforcing the Consumer Duty rules which came into force in mid-2023. This makes 2024 a critical year for the rules: if the FCA doesn’t announce any investigations or fines next year for breach of the rules, they’ll likely end up being regarded as toothless in the eyes of the industry. If the FCA does step up, however, the company they target will signal which parts of the FS scene are in the regulator’s crosshairs.” Fintechs will be asked to help standardise ESG reporting Steve Round, Co-Founder, SaaScada “In 2024, most companies will have completed at least one annual report disclosing some key ESG indicators: such as their diversity targets, or Scope 1, 2 and 3 greenhouse gas emissions. Many of these disclosures will be impenetrable and unstandardised. To try to avoid this trap in the future, many investors and businesses will be looking to standardise their ESG reporting frameworks in 2024 – and will, in turn, look to banks and fintechs to create the platforms to facilitate this.” FCA will be called on to overhaul the mortgage market Steve Round, Co-Founder, SaaScada “Many people will continue to face hikes in their mortgage payments and rents as the effects of higher interest rates continue to trickle throughout the economy. To prevent families from losing their homes, we’ll likely see the FCA come under pressure from industry and government to relax its limits on mortgage terms, allowing providers to offer 50-year mortgage products – or even more. These products aren’t without precedent, with Japan having experimented with 100year mortgages at the peak of its property bubble in the 1980s.”
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