June 21, 2024
The Top 10 Financial Trends to Watch in 2024
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Let's see which trends you need to keep an eye out for in 2024
Introduction
As we pass the first half of 2024, the trends that define the global financial landscape for the year have started to take shape. Some of the biggest economic and political stories are emerging as we move towards key elections in both the UK and the US, and post-pandemic economic growth is starting to pick up again, despite inflationary pressure and a maintenance of higher than average interest rates. We've put together 10 key trends that are shaping the year's finances and dictating how we are investing our money.
10 Key Trends
- Resurgence of Digital Currencies: Bitcoin & Beyond
Economic uncertainly always leads to an increased interest in cryptocurrency, and this cycle has been no different. High inflation has led to an influx of capital to blue chip crypto coins like Bitcoin and Ethereum. With central banks also exploring their own digital currencies and a number of crypto ETFs emerging, expect to see further developments in the adoption and regulation of digital currencies. This is now a global trend
- ESG Investing
Another trend driven by geopolitical circumstances is an increased interest in Environmental, Social & Governance investing, particularly with the envionmental concerns over global warming. In the second half of 2024, excpect a surge in popularity of ESG funds and larger pressure on big multinational companies to demonstrate an adherence to key ESG initiatives and ethical practices.
- AI in Financial Services
AI is revolutionising financial services, and more broadly, the whole tech ecosystem. The ripple effects of OpenAI's Chat GPT have been felt throughout almost every industry, and financial services is no exception. Expect improved customer experiences, risk management and automated trading. H2 2024 will see better integration of AI too, making financial services more efficient and more personalised.
- DeFi
Decentralised Finance, or DeFi, is a disrupting technology that offers alternatives to financial services such as lending, borrowing and trading. The DeFi sector is still expanding rapidly despite some resistance from traditional banks. It eschews central regulatory bodies in favour of secure distributed ledgers, similar to those used for cryptocurrency.
- Green Bonds & Sustainable Finance
These instruments are gaining popularity as investors seek to support environmentally friendly projects and some of the ESG initiatives we mentioned above. Their market has already been predicted to grow significantly in 2024, reflecting a broader shift towards sustainable finance. Creative ways of funding green projects are allowing disruptors like startups tackle the sustainable finance market, which is also spurring large banks into action.
- Advancements in Blockchain Technology
This is continuing to evolve, allowing new solutions to long-running financial problems to emerge. Innovations are expected to enhance not just finance but also supply chain, digital identity management and the ownership of assets, both modern and traditional.
- Big data in Banking
Big data analytics is allowing banks to offer much more personalised services to their customers. In 2024, banks will be continuing to leverage data to tailor products to customer needs, anticipate those needs before they emerge and enhance user experiences. This will entrench existing monopolies and drive further customer loyalty and satisfaction.
- Increased Regulation
All of these new technologies bring with them a whole host of regulatory hurdles to overcome. The bodies are tightening compliance requirements already to ensure responsible use of them, protect consumers and maintain market stability. Financial institutions of all types will face growing challenges in meeting these regulations while continuing to innovate.
- Expansion of Wealthtech
All new technology brings with it those who stand to gain, and these are no different. Wealthtech, including robo-advisers, are making wealth management more accessible and affordable. This year will see increased adoption of these platforms (including Strabo!) as they offer more sophisticated financial planning and investment management to a broader audience than ever before.
- Bigger impact of Geopolitical Events on Global Markets
Geopolitical events such as trade tensions, war, politican instability and policy changes have significant impacts on globale markets. In 2024, investors need to stay informed about geopolitical developments to navigate the potential risks and opportunities they present.
So there you have it! What do you think the biggest changes we're seeing financially around the world are this year, and how are they affecting your investment thesis? You can let us know directly, or on socials @yourstrabo.
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