Priya Patel
In its finance forecast for 2024, Demica, a market-leading fintech company, highlights several key trends and developments in the financial services industry:
- Banks are expected to focus on fostering long-term relationships with existing customers due to persistently high interest rates. Working capital financing will become a preferred alternative to traditional credit facilities.
- Supply chain finance funding markets will see a strategic shift, with banks accelerating the origination of transactions directly. This is driven by the need to build customer intimacy, capture more margin, and manage the impact of increased borrowing costs on profitability.
- Banks will ramp up their volume of supply chain finance assets to adapt to the evolving global trade finance landscape, which is moving towards open account trading. Advanced technological solutions will be integrated to enhance operational efficiency and risk management.
- Partnerships between banks and fintech companies are expected to increase, enabling the replacement of legacy systems, enhancing customer experiences, and accelerating the development of new products. These partnerships are particularly active in emerging markets like India.
- Sustainable finance is set to take a significant leap forward in 2024, especially in emerging markets. Financing solutions will extend to smaller producers and suppliers through partnerships with supranational institutions.
According to Maurice Benisty, Chief Commercial Officer at Demica, the banking sector will continue to face challenges from global volatility, but initiatives for innovation and adaptation, particularly in supply chain finance, will mark significant progress in sustainable finance and financial access in emerging markets.
