Finance Trends 2024: Top 5 Finance Trends to Watch
The world is constantly changing and that naturally has various effects on investment potential.
With 2023 almost in the rearview mirror, it’s already time to start looking into some potential 2024 finance trends.
There have been quite a few transformations over the past 12 months, creating some potential opportunities in this new financial landscape.
In this article, we will go through some of the finance trends to consider keeping an eye on in 2024, the given advantages and disadvantages and more.
Sounds interesting? Let’s get started.
Table of Contents
Finance Trends 2024: Introduction
Before we look into the finance trends to watch for 2024, we have to start with the basics - and that is by defining finance trends.
If something is trending up in the fashion world, it means that a decent number of people have been adopting that particular style.
And if we say that a TV show is trending down, it means that said show has been losing viewers over time.
A finance trend isn’t that different from a regular trend. In other words, finance trends indicate that the market, or one specific asset, is heading in a general direction - either up or down. In finance, we can usually split trends into two categories:
Uptrends: in an uptrend, the market moves towards a gradual increase in price.
Downtrends: on the other hand, in a downtrend, the market moves in the opposite way, towards a gradual drop in price.
Of course, prices will always oscillate, which is why these are referred to as trends.
While the price may drop occasionally in an uptrend, it is generally moving up. Likewise, the price may rise in a downtrend, but it will generally move down.
In 2023, the fintech industry saw plenty of interesting trends. One could say that 2023 was the year of AI (artificial intelligence), a term we will likely hear more and more going forward.
We also saw previous trends continue: digital payments, decentralized finance and cryptocurrencies, personal finance, open banking, cybersecurity and privacy, plus software as a service (SaaS) were all generally trending up this year.
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What are the Best Finance Trends 2024 to Watch?
Having already looked back at the finance trends in 2023, it’s time to turn towards the future.
Which are the best finance trends to watch in 2024? We will now take a closer look at some of the potential finance trends 2024 to keep an eye on next year.
1. Artificial Intelligence (AI) and Machine Learning (ML)
Artificial intelligence (AI) and machine learning seemed like something out of a sci-fi novel.
But, in recent years, there have been some major steps in the area. And, as mentioned earlier, both AI and ML were among the hottest topics in 2023.
In finance, algorithms have been used in trading bots and automated trading, while also working to detect and prevent fraud and to offer better customer service. Expect AI to become even more prevalent in the coming years, including 2024.
Advantages and Disadvantages of AI and ML:
- In finance and in other areas, AI can limit human error, speed up processes, and also provide different new solutions to old problems. Algorithms are a very efficient way to quickly get through mountains of data, making AI and bots very helpful.
- The quick growth in AI and the improved efficiency of machine learning have naturally sparked debates about ethics and the limits that should be imposed on AI. This debate will continue in the foreseeable future.
2. Regenerative Finance (ReFi)
Sustainability is a gradual trend and regenerative finance goes in line with these principles. Unlike sustainability, however, ReFi has some even more ambitious goals.
As the name suggests, ReFi plans on assisting with regenerating environmental damage, by combining sustainable practices with social investing.
Blockchain technology is a key part of ReFi as well. The platform’s transparency makes it easier for investors to know where their assets are going, and the decentralized model allows a more democratic process in decision-making.
Combining two popular trends into one, ReFi is should be interesting in 2024.
Advantages and Disadvantages of ReFi:
- ReFi allows investors to align their beliefs with their assets. One could be investing in sustainable practices, causing a positive social and environmental impact.
- ReFi is directly related to blockchain technology, which means it also shares some of its disadvantages. Volatility and the risks involved with lesser-known blockchains and tokens are things to keep in mind.
3. Sustainable Investing and ESG
Environmental, Social and Governance (ESG) and sustainability are the pillars of ethical investing. Much like ReFi, ESG-compliant companies and sustainable practices allow investors to put their money where their values are.
Investors have shown a growing interest in ESG-compliant companies with sustainable practices. As a result, this has also driven the market to adapt, with an increasing number of companies adopting sustainable practices and producing ESG reports.
Sustainable investing and ESG have been in vogue for a while, and that trend will likely continue in 2024.
Advantages and Disadvantages of Sustainable Investing and ESG
- Sustainable investing and ESG are key to the new generation of ethical investors. Companies have been trying to adapt to this new reality, creating new opportunities and alternatives to invest in. This is a growing market that will continue to expand in the near future.
- Greenwashing is probably the biggest concern regarding sustainability and ESG. Companies have been accused of manipulating data in order to look “greener” and draw in investors.
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4. SaaS Technology
SaaS, short for Software as a Service, has produced impressive numbers in recent years. The growth in the streaming segment, driven by popular SaaS companies like Netflix, Spotify, or HBO Max, is one of the biggest reasons behind it.
SaaS removes the need to install software, allowing users to access the services anywhere.
For companies, SaaS makes maintenance easier and relatively cheaper compared to regular software. Investing in SaaS was a popular trend before 2023, and likely it will continue rising in 2024 as well.
Advantages and Disadvantages of SaaS Technology:
- Most SaaS companies operate on a subscription-based model. This makes their growth and revenue relatively stable, which can be seen as a positive for investors.
- There is a lot of competition in the SaaS segment. With inflation still on the rise, customers could opt to end some of their subscriptions to these services in order to save money. Some companies, like Spotify, underperformed slightly in 2022 and 2023 compared to early expectations.
5. Decentralized Finance (DeFi)
The blockchain-based economy continues to draw an ever-growing number of adepts. Decentralized finance, or DeFi for short, is a general term used to group blockchains, cryptocurrencies, and similar assets under a bigger umbrella.
Investing in DeFi has been trending up recently. Still fairly new, DeFi is an evolving field, but it already offers some options.
Advantages and Disadvantages of DeFi:
- DeFi is a fast-growing segment, which continues to draw in new users. The usage of blockchain technology in financial transactions has been on the rise, and the trend probably won’t change in 2024.
- DeFi, like all cryptocurrencies and blockchain-related investments, is extremely volatile. As always, you will need to carefully balance the risks and rewards before investing.
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Finance Trends 2024: Conclusion
While 2023 was already an interesting year in terms of fintech and finance trends, we can expect some even more eventful times ahead in 2024. With a deep understanding of the market, investors can stay ahead of the curve by anticipating these trends.
You can start investing in the finance trends 2024 with a reliable broker, like Admirals. We provide investors with the tools to trade and invest with the MetaTrader 5 platform.
With features like AI trading, personalised charts, indicators, news, and educational tools, users have plenty of tools to use in their favour, making it easier to find the best finance trends.
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What are the emerging finance trends 2024?
Some of the projected emerging finance trends 2024 include:
- Artificial Intelligence and Machine Learning
- Regenerative Finance (ReFi)
- Sustainable Investing and ESG
How to predict future financial trends?
While it's difficult to predict financial trends, one can predict future financial trends via the following steps:
- Gather past historical data and analyse trending verticals
- Define a time frame for the given trends
- Choose a method for the financial forecast method (Quantitative or qualitative forecasting)
- Monitor results and analyse financial data
- Repeat and adjust based on the results
Other Articles of Interest:
- How to Trade with AI: MetaTrader 5 Update
- What is ReFi and How Does It Work?
- Top 5 ESG Stocks to Watch
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