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Post: AI and IoT Hype Trends in the Fintech Industry: Cutting Rapid Revolution in Financial Institutions and Service Providers to Respond to New Market Demands



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Transportation and technology concept. ITS (Intelligent Transport Systems). Mobility as a service.Telecommunication. IoT (Internet of Things). ICT (Information communication Technology).

By Marcelina Horrillo Husillos, Journalist and Correspondent at The European Financial Review

This explosive growth reflects the seismic shifts transforming financial services as cutting-edge technologies and evolving consumer expectations collide.

Financial institutions and customer-focused services are actively seeking ways to streamline operations, reduce reliance on manual tasks, and personalize financial planning and investment management.

The swift rise of innovative technologies such as AI and IoT offers groundbreaking solutions for automating several processes, from transaction management to risk evaluation. By leveraging automation, financial institutions can enhance operational efficiency, minimize errors, and expedite decision-making processes.

The SNS Insider report indicates that the AI in Fintech Market Size was valued at USD 11.89 Billion in 2023 and is expected to reach USD 41.5 Billion by 2031, reflecting a robust Compound Annual Growth Rate (CAGR) of 17.05% over the estimated period of 2023-2031. Additionally, research forecasts the fintech industry to amass USD 1,152.06 billion by 2032, with IoT being a key factor in this growth.

The increasing need for automation processes within financial institutions and customer service providers has been the primary driver in these developments. AI is revolutionizing these sectors as organizations actively pursue ways to streamline operations and reduce reliance on manual tasks. Additionally, the implementation of IoT is accelerating the shift towards digital payments and contactless technologies, transforming finance departments more rapidly than ever. 

Consumers and businesses are adopting cashless transactions via IoT-enabled e-commerce systems, mobile banking, and e-wallet apps. By 2028, transactions through digital wallets are expected to surpass USD 16 trillion, a 77% increase from 2023. This growth is primarily facilitated by IoT technologies like near-field communication (NFC) and enhanced secure channels. Finance departments leverage these IoT-integrated solutions to streamline accounts receivable and payable processes and improve cash flow management.

Most Popular Trends

Generative AI

Is the biggest technological advancement in 2023, a phenomenon gradually transforming the financial sector. In particular, the influence of fintech and the application of generative AI on chatbots is expected to grow this year through banking technology, such as apps and other online payment services, which could produce new revenue streams.

Generative AI is expected to be the most influential trend permeating the entire financial services sector of 2024. From reshaping the customer experience to bringing forth wealth management tools, the financial services sector will be at the helm of managing the lasting impact of artificial intelligence (AI) on organizations and people.


Its integration with financial technology offers unprecedented promise to finance departments aiming to streamline processes, increase efficiency, and drive innovation. From artificial intelligence and blockchain to advanced cybersecurity measures and cloud computing platforms, finance professionals are now equipped with many IoT-enhanced technological advancements.

Keeping track of emerging IoT and fintech trends will position financial departments for success in an increasingly digital and interconnected world. As we look towards the future, leveraging these innovations will be crucial for navigating the evolving landscape of financial technology and driving sustainable growth.

Blockchain and Web3

Blockchain technology is revamping the fintech industry in myriad ways, such as eliminating third parties, reducing operational time and cost, enhancing the identity verification process, etc. Web 3.0 is a new and secure technology where users are given more control over financial transactions and data. These, and the other benefits of blockchain and Web3 in finance, are designed to help the sector transform digitally.

Hybrid cloud technology

Tools such as cloud computing. are likely to become more popular in organizations, which see the benefits of having access to infrastructure, applications, servers, and more on-demand Internet services.

More organizations will likely transition to hybrid cloud models for their workloads and to further manage and conduct compliance tasks. It’s important to recognize that a hybrid cloud by default is different than a hybrid cloud by design, so happening upon a hybrid cloud infrastructure doesn’t mean an organization is getting the greatest efficiency, functionality, or scalability. Therefore, financial institutions need to keep an eye on digital transformations and the integrations required to support growth and competitiveness in a curated hybrid cloud environment.

Cybersecurity risk management

AI presents a large number of challenges, especially when it comes to cyber risks. There have been, and will likely continue to be, cyber threats that are only getting more and more complex as technological advancements continue. Mitigation efforts and using the proper risk management tools will be vital as threats increase. The need for increased fraud detection will also be important to watch in the coming year as more and more financial institutions try generative AI; an investment in tools and infrastructure to combat such threats is likely to occur in 2024.

Open banking

The premise of open banking provides secure access to a customer’s financial data from traditional banks and other financial institutions using application programming interfaces, also known as APIs.

The use of open banking is expected to increase as customers seek to take control of who has access to their data. APIs may likely become the preferred method to help banks connect technologies to their internal systems and streamline processes.

Digital currencies

Generative AI and the hype around it knocked cryptocurrencies out of the limelight, but crypto is expected to make its return in 2024. The financial services sector has seen a major shift to online banking methods and managing assets, like credit cards, in an all-online setting.

Separately, blockchain is also likely to come back into the picture. The shared system of records will become more important in managing confidential information and transactions.


The amplitude of the hype wave around generative AI, IoT, and other innovative technologies is colossal, and we still cannot be sure that we have reached the peak. The urgent market demands enable fast implementation of these disruptive technologies to automatize processes, which makes them faster, more efficient, and less reliable on third parties.

The solutions that companies of all sizes are integrating will transform commerce across the world, from the way bus riders choose their routes in Seattle to how soybean farmers finance their crops in Brazil.

On the other hand, the rapid growth of these transformative technologies brings into question personal data and privacy concerns, which will ultimately change the regulatory requirements in financial and customer-focused services.

In many cases, the monumental amount of time and resources consumed by the hyper-focus on AI and fast tech is happening without significant enough concern for data security, privacy, legal and copyright issues, or even any understanding of what the underlying technology is doing to the data.

Allowing the tech hype to hijack decisions around cybersecurity could be a high price to pay in many firms, particularly where maturity is low and resources are scarce. Thus, it may be necessary to slow things down; companies may need to reevaluate, put things in perspective, and allow for crucial discussions about the need for AI to take place. Overall, a more balanced and measured approach is required when navigating the adoption of AI in our financial and commerce-related practices.

Lora Helmin

Lora Helmin

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