The finance market is ever-evolving. From the waves of the share market to the new inventions such as UPI, there is so much to know in the financial market. Such is the case this year with the finance trends. There is so much to learn, know and explore.
But where to start?
Worry not as we shall help you out. Gear up and get your reading glasses as we are explaining the top financial trends that rule the financial market in 2024.
What is a finance trend?
It is important to understand what are financial trends before delving into the pointers to watch in 2024 regarding finance. When a certain style is popular in the fashion industry, it indicates that a sizable portion of the population has been wearing it. For instance, if a TV program is moving downward, it indicates that its audience has been declining over time.
A typical trend and a financial trend are not all that dissimilar. To put it another way, financial trends show that the market or a particular asset is moving generally either upward or downward. Generally speaking, there are two types of trends in finance:
Uptrends
During an uptrend, the market gradually rises in value.
Downtrend
Conversely, in a downtrend, the market moves in the other direction, indicating a slow decline in value.
Naturally, there will always be price fluctuations, which is why these are called trends.
In an uptrend, the price is normally rising, however it may occasionally fall. In a downtrend, the price will often move lower, although it may also climb.
Some more info about these trends
There were many intriguing developments in the fintech sector in 2023. 2023 could be referred to as the year of artificial intelligence (AI), a phrase that will probably be used more frequently in the future.
Additionally, we observed that prior patterns persisted: this year, software as a service (SaaS), open banking, personal finance, digital payments, decentralized finance and cryptocurrencies, cybersecurity, and privacy all witnessed increases.
So, without further ado, let’s take a good look at the trends ruling the market:
1. Machine learning (ML) and artificial intelligence (AI)
Machine learning and artificial intelligence (AI) seemed like something from a science fiction book a few years ago. However, there have been some significant advancements in the field in recent years. Additionally, as was already said, in 2023, AI and ML were two of the most popular subjects.
Algorithms have been used in finance to improve customer service, detect and prevent fraud, and create trading bots and automated trading. In the years to follow, including 2024, expect AI to become even more common.
Benefits and Drawbacks of AI and ML
AI may reduce human error, expedite procedures, and offer fresh approaches to long-standing issues in the financial industry and beyond. AI and bots are incredibly useful because algorithms are a very effective technique to swiftly trawl through mounds of data.
Naturally, discussions concerning ethics and the appropriate boundaries for AI have been triggered by the rapid development of AI and the increased effectiveness of machine learning. This discussion will go on for some time to come.
2. Finance Regenerative (ReFi)
Regenerative finance is consistent with the steady trend of sustainability. However, ReFi has some even more ambitious ambitions than sustainability.
As the name implies, ReFi intends to use social investment and sustainable practices to help repair environmental harm.
Another important component of ReFi is blockchain technology. Investors may more easily understand the direction of their assets because of the platform’s transparency, and the decentralized format permits a more democratic decision-making process.
ReFi should be intriguing in 2024 since it combines two well-liked themes into one.
Benefits and Drawbacks of ReFi
Investors can match their values with their assets via ReFi. Investing in sustainable practices could have a beneficial effect on the environment and society.
ReFi shares some of the drawbacks of blockchain technology because it is closely tied to it. It’s important to consider volatility and the dangers associated with less well-known blockchains and tokens.
3. ESG and Sustainable Investing
Sustainability and Environmental, Social, and Governance (ESG) are the cornerstones of ethical investing. Similar to ReFi, investors may place their money where their ideals are by supporting sustainable practices and ESG-compliant businesses.
Businesses with sustainable practices and ESG compliance are attracting more and more attention from investors. As a result, the market has also had to adjust, with more businesses implementing sustainable practices and generating ESG reports.
ESG and sustainable investing have been popular for some time, and in 2024, they’re probably going to stay that way.
The benefits and drawbacks of ESG and sustainable investing
The new generation of ethical investors relies heavily on ESG and sustainable investing. Businesses have been making an effort to adjust to this new reality by developing fresh investment options and prospects. This market is expanding and is expected to do so in the near future.
The main issue with sustainability and ESG is most likely greenwashing. Businesses have been charged with falsifying statistics to attract investors and appear “greener.”
4. Technology SaaS
Software as a Service, or SaaS, has seen remarkable growth in recent years. One of the main causes of this is the expansion of the streaming market, which is being propelled by well-known SaaS providers like Netflix, Spotify, and HBO Max.
SaaS enables customers to access the services from any location by eliminating the requirement to install software.
When compared to traditional software, SaaS simplifies and lowers the cost of maintenance for businesses. Prior to 2023, investing in SaaS was a common practice, and it is anticipated that this trend will continue to grow in 2024.
Benefits and Drawbacks of SaaS Technology
The majority of SaaS businesses use a subscription-based business model. As a result, their revenue and growth are comparatively steady, which is advantageous for investors.
In the SaaS market, there is fierce competition. Customers may decide to cancel part of their subscriptions to these services in order to save money, especially while inflation is constantly rising. In 2022 and 2023, certain businesses, such as Spotify, performed marginally worse than anticipated.
5. Decentralized Finance (DeFi)
An increasing number of experts are drawn to the blockchain-based economy. A broad word used to encompass blockchains, cryptocurrencies, and related assets is decentralized finance, or DeFi for short.
DeFi investments have been increasing lately. DeFi is a relatively new field that is still developing, although it already provides several alternatives.
Benefits and Drawbacks of DeFi
DeFi is a rapidly expanding market that keeps attracting new consumers. Blockchain technology has been increasingly used in financial transactions, and in 2024, this trend is unlikely to reverse.
DeFi is incredibly volatile, much like all cryptocurrencies and blockchain-related investments. As usual, before making an investment, you must carefully weigh the risks and rewards.
Concluding
While we have tried to cover the most important financial trends of the year, there remains much more to be explored in the year ahead. We may even see some better variants of these technologies that will have fewer drawbacks and more advantages. Time will only tell how far these trends will help real people in the real world.
Stay tuned to our blog for more such updates.
Frequently Asked Questions
What are the main financial advantages of AI and machine learning?
There are many advantages of AI and machine learning. The finance trend can help with customer service, automate trading, detect fraud and hence, can help the entire financial industry.
Why should I know about financial trends?
In a way or two, we are always dealing with the various aspects of the financial industry in our lives. Be it the FDs you make, the bank statements, the use of credit cards, UPIs or the stock market, we are all affected by the trends in the finance market. Hence it’s important to stay up to date with the financial trends, news and updates.
What is Saas technology?
Saas or software as a service makes financial services easy to use and saves cost while doing that. Such software works well in providing a better suite of services to common people all across the country and hence, is an important trend to look forward to.
What will be the financial trend in future?
In the coming year, trends like machine learning, audio-visual realities, bitcoin currencies and decentralized finance may rule the market. There will also be new companies joining the stock market race, which is something to look forward to.
Which company will be financially strong in India in 2025?
Companies like Reliance, Tata Motors, Mahindra, Shri Ram, Aditya Birla and many more are financially strong in 2024. These companies are expected to continue their run in the next year as well.
