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Industry insights

2024 trends: strategic alliances,  compliance complications, and the adoption of embedded finance

- 4 minute read

As we approach the new year, several anticipated trends are set to redefine the future of fintech, banking, and embedded finance. Let's delve into three pivotal trends that could shake up the industry in 2024.


Fintechs and traditional banking players will continue to forge strategic alliances  

2024 is expected to be marked by a seismic shift in the financial landscape, as fintech titans and traditional financial institutions embark on a frenzy of mergers, acquisitions, and partnerships. While fintechs have been disrupting the financial landscape for years with innovative solutions, traditional institutions still possess deep-rooted experience and customer trust. Recognising the strengths of both, mergers and partnerships are poised to become commonplace.

We expect that in the new year a growing number of traditional banks will acquire or partner with agile fintech companies to bolster their digital payment capabilities, while harnessing the specialism of fintechs. The synergy between these businesses could bring forth a blend of technology-driven solutions and industry expertise, ultimately benefitting consumers with a broader array of seamless, customer-centric services.

With funding also becoming harder to secure for standalone fintech ventures, collaboration with banks offers a fast-track to profitability and broader market reach. While many have seen SumUp's €285M raise as a changing of the tide, the reality is that finding funding remains a struggle for many. A new wave of fintechs is emerging with the explicit aim of being acquired by larger entities due to the complex market conditions, emphasising the symbiotic relationship between fintechs and banks.

This underscores the importance of partnerships between traditional finance and fintech innovation, as it becomes paramount for sustained growth and competitiveness in the global financial arena. 


There will be heightened focus on regulatory compliance 

Regulatory compliance remains a critical cornerstone for the industry. Regulatory bodies are expected to intensify their focus on governing the sector, and in 2024, we will witness a heightened emphasis on adhering to stringent regulatory frameworks.

We only need to take a look at disruptive financial models like Buy Now Pay Later (BNPL) to see how it has ignited debates on the need for enhanced regulations to safeguard consumer interests and ensure responsible lending. Some argue that existing regulations may be insufficient to address the unique risks posed by BNPL schemes, urging for stricter oversight to prevent consumer debt spirals and ensure transparent disclosure of terms. 

On the other hand, fintech companies report that compliance with current regulations can be intricate due to the dynamic nature of their services and the complexities of adapting traditional regulations to modern products. This heightened focus on compliance unveils a delicate balance between fostering innovation and protecting consumers, posing the question of how regulations can help navigate the evolving fintech landscape without stifling innovation.

Overall, fintech companies and traditional institutions alike will have to channel considerable efforts into ensuring compliance with regulations. This will take time and resources, but it will also encourage trust and credibility, while mitigating the risks associated with such a dynamic environment. Regulatory compliance will serve as a catalyst to foster a more stable and secure financial ecosystem, ultimately safeguarding consumer interests and the industry long-term sustainability. 


Embedded finance will disrupt the financial landscape as we know it

In 2024, we anticipate embedded finance to seep across the wider spectrum of industries. The appeal of embedded finance lies in its ability to offer tailored financial solutions directly within existing customer journeys, enhancing convenience and accessibility. With the Banking-as-a-Service (BaaS) model, recognised as the engine behind the rapid adoption of embedded finance, non-banking entities can leverage the infrastructure and regulatory compliance of licensed financial institutions.

As more industries recognise its value, we will see businesses of all types and sizes incorporating financial functionalities into everyday activities, disrupting traditional financial services models.

The convergence of embedded finance and BaaS underpins a new era of financial accessibility, where the boundaries between traditional banking and other sectors blur, paving the way for a more interconnected, convenient, and inclusive financial ecosystem.

Reflecting on the events that marked the embedded finance sphere in 2023, Karine Martinez, our Head of Sales, shares her expert insights on what’s expected for the new year: 


BaaS companies will mature, and customers will prioritise reliability… 

BaaS has been on quite a rollercoaster over the last few years. Lauded as ‘the next big thing in fintech’ many people saw a significant opportunity in the business model, but a flurry of recent issues has shown it’s not an easy thing to deliver. 

In 2024, I think we’ll see a bigger focus from BaaS companies and their customers on reliability and compliance capabilities. The very core of the solution is to take care of these things so customers don’t have to worry, and this will be the only priority for businesses looking to outsource in 2024. Anything extra, no matter how new and shiny, will take second place.

But this should lead to good things. 

It will lead to clearer expectations of what partners need from BaaS companies and payment solutions providers, more reliable and compliant services, and ultimately better and more trusted partnerships between providers and their customers. It’s going to be an exciting year as BaaS continues to mature and develop.

In conclusion, 2024 promises to be a transformative year for the fintech, banking, and embedded finance sectors. The trends of increased strategic alliances, heightened compliance needs, and the growing popularity of embedded finance will mark an era of collaboration, innovation, and customer-centricity. Embracing these changes will be pivotal in navigating the evolving landscape, driving growth, and delivering enhanced value to consumers in the years to come. 

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