In an era of rapid digital transformation and evolving customer expectations, staying ahead of the curve is more crucial than ever for financial institutions.

From the rise of fintech collaborations to the increasing emphasis on sustainability, these trends are reshaping how banks operate, engage with clients, and drive innovation.

The team of analysts from Datos Insights recently published its Top 10 trends for 2024.

Modernisation

• As payments are a mission-critical function and a significant source of income for banks, the function takes a prime place in the banks’ investment strategy with Dato’s research showing that 94% of businesses planning to invest significantly in the next 24 to 36 months.

• Payment modernisation will fill a critical need for automation and real-time payments.

• Although Datos expects spending on payments to be strong, the analysts also see many FIs struggling with their business cases.

Vertical Payments

• In industries such as manufacturing, construction and healthcare, Datos Insights is seeing strong market opportunities.

  • Manufacturing

    • Payment solutions that can weave together supply chain management, cash flow automation, and automated billing capabilities will be of high interest.

  • Construction

    • Smart contracts with automated payment actions, real-time payments, and integrated receivables.

  • Healthcare

    • Automated collections and past-due recoveries, speedy processing for B2B payments between payer and provider, and virtual cards for commercial clients.

Foreign Exchange

• Datos sees a rebound in cross-border payments after the pandemic and while volumes may be less than domestic payments, they are critical.

• Many businesses are also reporting an increase in not only volume but in the countries they will be transacting in.

• Datos has also outlined the developing FX processing models:

  • Banking-as-a-Service: executable FX rates via API gateway backed by the liquidity and robust risk management capabilities of a partner FI.

  • FX-as-a-Service: Multi Bank FX best execution service.

  • Peer-to-peer (P2P) FX trading: FX hedges are executed in bulk at a fixed, predetermined transaction cost, rather than being split with higher overhead costs.

  • DLT-based FX trading: Automated matching and netting transactions reduce costs and reliance on external settlement networks.

Source: Datos Insights