How Was 2024 for the FinTech World? What Awaits the FinTech Sector in 2025?

2024, which we are about to leave behind, was a period of groundbreaking developments in the fintech industry. From the pinnacle of personalization achieved through artificial intelligence and machine learning in financial services to the widespread adoption of blockchain and DeFi applications challenging traditional systems and the reshaping of banking through digital transformation, these were some of the most notable highlights of the year. Innovative approaches like embedded finance and open banking further increased the role of financial technologies in our daily lives. So, what lies ahead for the fintech industry in 2025 following this rapid transformation? In this article, we will look back and explore the possibilities for the industry's future, discussing topics such as sustainability, RegTech, and the metaverse.

 

 

The year 2024 was a dynamic one for the fintech industry. Developments in the sector paved the way for financial services to become more accessible, user-friendly, and innovative, significantly easing our lives. Here are the key topics that shaped the fintech agenda in 2024:

 

• Artificial Intelligence and Machine Learning

• The Evolution of Blockchain and DeFi

• Digital Transformation and Changes in Banking

• Embedded Finance Applications

 

In 2024, artificial intelligence (AI) and machine learning technologies played a significant role in the development of the fintech industry. These technologies transformed the sector across various areas, from enhancing user experience to improving security processes, mainly drawing attention to personalized financial services. AI-powered tools made it easier to analyze individuals’ financial preferences and spending habits, offering tailored solutions. Additionally, AI-based chatbots and virtual assistants not only provided 24/7 support but also offered personalized budgeting and savings advice, contributing to more informed financial decisions.

 

AI technologies and machine learning algorithms also redefined the rules of the game in security. They made it easier to analyze users’ normal financial behaviors and instantly detect unusual transactions. For example, scenarios where unexpected transactions from a new location or abnormal spending patterns are quickly flagged to users have become standard security measures compared to the past. Furthermore, AI plays a crucial role in combating financial fraud. These technologies significantly reduced fraud rates, particularly in e-commerce and mobile payment systems, by detecting fake identities and transactions. Looking to the future, the transformation brought about by AI and machine learning technologies in the sector is expected to continue shaping the future of individual and corporate financial services.

 

2024 marked a turning point for the fintech industry with advancements in blockchain technology and decentralized finance (DeFi). As digital assets, particularly cryptocurrencies and tokens, gain broader acceptance and adoption in global financial markets, revenues from financial technologies are predicted to reach $400 billion by 2028. The secure and transparent infrastructure provided by blockchain-based systems contributed significantly to the rapid growth of DeFi applications. As an alternative to traditional financial systems, DeFi became one of the most important topics of the year, enabling individuals to conduct financial transactions without intermediaries. These applications provided lending, borrowing, savings accounts, and asset trading services at lower costs and faster processes. Smart contracts were vital in enabling these transactions to be fully automated, secure, and decentralized.

 

Blockchain-based systems supporting digital assets also introduced significant payment and identity verification innovations. This technology, which offered speed and cost advantages in cross-border payments, made financial transactions more accessible. Blockchain-based identity verification systems enhanced user security and set a new standard for fraud prevention. By securing individuals’ personal information on a distributed network instead of a centralized database, these systems protected user privacy while providing robust protection against identity fraud attempts. With their freedom, speed, and security, these technologies are expected to continue playing a key role in shaping the future of the fintech industry in 2025 and beyond.

 

In 2024, digital transformation reshaped the banking industry, leading to the digitization of financial services. Digital banking services surpassed traditional banking models due to their ability to meet users’ needs quickly, conveniently, and cost-effectively. The increase in mobile banking and digital wallet usage during this digital transformation had a significant impact. As users discovered they could easily manage accounts, transfer money, pay bills, and perform investment transactions through mobile applications, the number of users opting for digital over physical bank branches increased. New-generation banks with entirely digital infrastructure also began offering more flexible solutions with user-friendly interfaces and personalized services.

 

Digital wallets played a significant role in facilitating the digitalization process by offering convenience, especially in e-commerce and daily payments. Innovations like NFC payments, QR code payments, contactless cards, and cryptocurrency integration accelerated financial transactions and improved ease of use. As a result of digital transformation, banks evolved from merely financial service providers to technology-focused companies. The year 2024 stood out as a period where the physical boundaries of banking were utterly overcome, and digitalization set new standards in the industry. These developments suggest that financial institutions will continue to provide faster and more effective solutions for users’ financial needs in the coming years.

 

In 2024, embedded finance improved user experiences by integrating financial services into non-financial platforms. Especially in online shopping platforms and social media giants, integrating financial services directly into existing platforms allowed users to manage their spending conveniently. This enabled users to perform financial transactions without leaving their accustomed interfaces. According to a report by Juniper Research, the global embedded finance market, currently valued at approximately $92 billion, is projected to grow by 148% to reach $228 billion by 2028.

 

The widespread adoption of embedded finance applications allows financial services to reach broader audiences and enhances user experiences. This trend is expected to continue in the coming years, bringing more innovations to the fintech ecosystem and advancing user experiences to new levels.

 

Following a year of significant developments in financial technologies (fintech) in 2024, the topics expected to dominate the agenda in 2025, enriched by continuous innovation, can be outlined as follows:

 

Regulatory technologies (RegTech) are critical in helping financial institutions comply with complex regulations. The global RegTech sector grew by 24.8% in 2024 to reach $16.45 billion, highlighting the rapid developments in this area. With new data privacy and security regulations, financial institutions are focusing on compliance processes. Investments in this area are expected to continue worldwide in 2025.

 

Sustainability has become a growing focus in virtually all fields, especially recently. The fintech industry is no exception. With the rise of technologies to reduce carbon footprints, environmentally friendly fintech solutions are gaining prominence in the financial sector. Sustainable investments and ESG (Environmental, Social, and Governance) criteria have already become significant considerations for investors during decision-making. This topic will likely remain prominent, with sustainability expected to be one of the most critical themes in the fintech sector in 2025.

 

The rise of virtual worlds is paving the way for financial transactions to enter these platforms. Financial activities within the metaverse and potential applications present new opportunities for fintech companies. In 2025, topics like virtual real estate investments, NFT-based digital art trading, and tokens used in virtual events are expected to stand out.

 

As a decentralized internet, Web3 promotes greater transparency and user-centric financial services. Blockchain-based applications allow users more control over their data and enable them to conduct financial transactions without intermediaries. This transformation became evident in 2024 with the growing adoption of DeFi (Decentralized Finance) applications, and the trend is expected to strengthen in 2025.

 

Crypto-based payment infrastructures and central bank digital currencies (CBDCs) are revolutionizing payment systems. Many countries continue to work on developing their digital currencies. These developments are significant for accelerating cross-border payments and reducing costs. New payment systems are anticipated to be among the topics discussed in 2025.

 

Sources: 1, 2, 3.