After a significant decline in industry investment over recent years, a survey of top FinTech professionals reveals strong confidence in the sector’s future. The results indicate that AI, Instant Payments, and Open Banking will be the key trends for the next 12 months, even as nearly 40% of fintech leaders identify cost management as a major challenge for payment processing.
Amsterdam, NL – 8 August, 2024: Silverflow, a prominent cloud platform for global card processing, has released survey findings showing that 91% of fintech leaders expect investment in the sector to increase in the coming year.
Conducted at Money 20/20 Europe in Amsterdam in June 2024, the survey included responses from leading companies like Visa, Mastercard, American Express, Adyen, Worldpay, Barclays, and Lloyds Bank Group, as well as numerous emerging startups, reflecting significant optimism about the industry’s future.
The Return of FinTech Investment
FinTech investment surged dramatically in the late 2010s, more than doubling from $148 billion USD in 2017 to $225 billion USD in 2021. However, it fell to $113 billion USD in 2023, a 42% drop from the previous year, largely due to increased borrowing costs. This decline mirrored a broader trend of reduced startup funding across various sectors.
Despite ongoing high interest rates, industry sentiment is turning positive. Robert Kraal, Co-founder and CBDO of Silverflow, noted: “Investors are shifting from backing numerous startups in hopes of finding a ‘unicorn’ to focusing on fewer companies with sustainable profit potential rather than limitless growth.”
He added: “This shift was evident when Silverflow secured €15 million in investment in 2023, demonstrating the value of our solution and the strength of our management team during a challenging period.”
Key Trends: AI and Beyond
The survey also highlighted major trends for the coming year: instant payments, open banking, and artificial intelligence (AI). AI remains a focal point, with its applications in optimization and anti-fraud operations, especially in payments where machine learning helps detect fraudulent activities. Anne Willem de Vries, Silverflow’s CEO, emphasized: “AI has long been integral to FinTech, and its role in optimizing and securing transactions will continue to grow.”
Cost Challenges in Payment Processing
The survey revealed that high fees and associated costs are the most significant challenges in payment processing, cited by 39% of respondents. Issues like data inadequacies and poor customer experience followed closely, each at 26%, while other concerns like usability and functionality were less prominent.
Kraal concluded: “The survey indicates an industry that’s faced challenges but remains resilient. Companies that address real problems profitably will lead the way, and the future promises exciting developments from innovative players, including us.”
