The Present and Future of Digital Finance: Looking Back on 2023 and Ahead to 2024

As we prepare to enter another new year, now is a perfect moment to take stock of both developments and expectations in the financial technology sector.

2023: Surging Demand and Positive Shifts

Here at Ponto, the past year saw us experience no less than 30% growth in organic adoption of our open banking solutions. We are, of course, delighted that our commitment to excellence and customer-centric innovation is paying off. But this is also a reflection of the strong market demand for user-friendly embedded banking technologies.

At the same time, we have noticed our customers’ becoming more positive about PSD2 consent renewal and KYC requirements. Initially viewed as regulatory burdens, these compliance measures are now welcomed as strategic assets which enhance security, control, trust and transparency in data sharing. This shift in perception goes hand-in-hand with a better understanding of the open banking ecosystem. We are pleased to have played our part in providing this education.    

For those with more advanced knowledge of open banking regulation, the most notable event from the past year was the announcement of plans for PSD3 (evolution of PSD2, expected to take effect around 2026). While the anticipated opening of access to new types of data was excluded, the path has been paved for development of premium APIs, which are viewed as a positive move towards creating a more efficient, value-sharing, and fair financial ecosystem. This updated approach, which transcends the limitations of the previous “free access” model, represents a strategic shift that should benefit the entire financial ecosystem, including banks, fintech companies, and end-users.

2024: Increased Integration, Security and Sustainability

Looking ahead to 2024, we’re excited about both evolution and revolution within the financial ecosystem. Here are our predictions for the four most significant developments:

• Increased collaboration between traditional banks and fintech. Watch out for a surge in partnerships between traditional banking institutions and fintech companies, focusing on creating more integrated and customer-centric financial solutions.

• Increased investment in cybersecurity and data privacy. These critical foundations for trust in digital finance will be supported through new security initiatives such as Kube and Intellisuite.

• A leap in AI and machine learning integration in financial services. This tech-forward revolution will redefine customer engagement and internal processes through more personalized banking experiences, streamlined services and operational efficiencies.

• A significant push towards sustainable finance. Financial practices will undergo a vital ethical and strategic shift, with institutions increasingly incorporating ESG (Environmental, Social, and Governance) criteria into their investment and lending decisions. This is not just a trend but a necessity for future-proofing the industry, which is both exciting and essential for the sector’s long-term health. The open finance ecosystem will significantly aid the achievement of ESG/sustainability goals (such as C02 footprint reduction).

With all this, embracing digital channels will move from being an option to being a necessity for banks and other financial institutions, both to stay competitive and for operating client support systems.

A Bright Future Lies in Wait

The financial services industry isn’t just reacting to change, but proactively shaping its own future. As 2023 gives way to 2024, we are incredibly excited to be at the heart of something that’s dynamically adapting, innovating, and growing in response to both internal advancements and external challenges.

Whatever industry you’re in or you serve, we’ll be here to help you benefit from open banking’s ever-growing treasure trove of opportunities.

In the meantime, from all of us at Ponto, we wish you and those you care about a peaceful and joyous holiday season.