Over the past decade fintech has transitioned from a small sector to a major component of financial services. According to Allied Market Research, fintech solutions are expected to grow from $4.8 billion in 2021 to $18.6 billion by 2031. They report an impressive annual growth rate of 14.8%.

This growth can be useful for accredited investors, family offices, and high-net-worth individuals because fintech creates tools that can enhance risk management and helpachieve potentially higher returns. 

This blog will explore three key areas of advancement in the fintech sector. We will specifically look at AI, crypto currency and regulatory technology.

1.  Artificial Intelligence 

A study by Moody’s Analytics revealed that nearly 20% of professionals in the fintech sector are now using AI, which is being integrated into the investment sector in various ways:

•   Chatbots

Big banks like Bank of America, Wells Fargo, BlackRock, and Citigroup have integrated AI chatbots.

These bots use natural, human sounding language, which makes it easier for customers to communicate when using banking apps and online money services. 

•  Assessing Risk

AI’s pattern recognition skills are helping investment firms analyze risk more effectively, because AI can process large sets of historical data to make well-informed predictions.

This means investors can make more knowledgeable decisions, potentially improving portfolio performance.

Blockchain and Cryptocurrency

The fintech blockchain market is growing quickly. Its value expected to increase from $4.66 billion in 2024 to $31.84 billion by 2029.

Because of this, cryptocurrencies are gaining popularity and attracting strong interest from investors. 

This change has led advisors to provide more comprehensive guidance on these assets, focusing on both their potential benefits and the regulatory issues they face.

Investing in blockchain and cryptocurrencies can diversify your portfolio and potentially boost returns. 

This is because cryptocurrency prices often move differently from traditional markets, potentially yielding higher returns in volatile times. But they are considered volatile and high risk.

To explore how you can include cryptocurrencies in your portfolio, click here.

Regulatory Technology (RegTech)

RegTech can help investors comply with financial regulations because it can automate and streamline compliance tasks.

According to Thomson Reuters’ Cost of Compliance Report, a new regulatory update is issued every 7 minutes. This frequency emphasizes the need for efficient compliance solutions.

RegTech plays a key role in mitigating a host of legal risks. This includes lawsuits, litigation, and contractual disputes.

RegTech can be important for industries under stringent regulatory oversight, like the alternative asset investment industry.

What can I do now?

There’s always more to learn. AI, blockchain technology, and RegTech are reshaping investment strategies, improving security, and ensuring compliance.

To learn more about these technologies and assess your readiness to invest in emerging fintech innovations, explore our educational resources or take our interactive quiz.