By Michael Wallis-Brown, Global Head of Mobile Financial Servies, Ericsson
In 2024, fintech is in a state of rapid evolution, driven by Digital Financial Services. These services, crucial for democratizing consumer purchasing and wealth management, are experiencing a surge in digital wallet-originated payments and are poised to surpass credit cards in online transactions. Projections from Juniper Research indicate a remarkable 77% increase in digital wallet transactions, exceeding $16 trillion by 2028. This surge in speed, accessibility, and digital innovation is reshaping the financial landscape.[i]
Digital wallets, beyond facilitating swift transactions, spearhead a financial revolution by reaching millions of unbanked users, particularly in developing markets. The expansion includes peer-to-peer payments, lending, investments, savings and Buy Now, Pay Later (BNPL) options, creating fresh opportunities for businesses.
As we look ahead, the below trends are what I believe will be key in shaping the trajectory of digital wallets in financial services from 2024 onwards.
New Horizons with Open-API/Open-Architecture Ecosystems
While the concept of Open Banking has been circulating for some time in Europe and North America, the integration of Open APIs within interconnected ecosystems has been driving growth in mobile money services for years ahead of incumbent banks. This evolution of Embedded Finance not only offers customers a seamless experience accessing various financial services tailored to their individual needs through a single platform, but also empowers non-financial merchants and businesses from all sorts of industries to integrate advanced financial solutions and finding new revenue streams.
An example in this domain is MTN’s Mobile Money platform (MoMo), powered by Ericsson’s Mobile Financial Services platform. MoMo facilitates access for third parties through an Open API platform, propelling it to the forefront of fintech in Africa and attracting over 24,000 developers who are actively exploring diverse financial services. Robust mobile networks will be the backbone of this transformation, ensuring secure and efficient financial transactions with banking-grade security, leading to enhanced app experiences and super app capabilities.
AI’s Pivotal Role in Financial Services
Artificial Intelligence (AI) is more than just a buzzword; it stands as a driving force reshaping the financial landscape. By harnessing data from multiple touchpoints, including mobile network data, AI enables personalized services based on user behaviors and preferences. This proves particularly crucial in improving credit scoring in emerging markets, where traditional credit bureau data may be incomplete and supplementary data remains largely unstructured. Furthermore, advanced fraud management systems utilize AI to map and analyze suspicious activities, fortifying the resilience of financial ecosystems. AI emerges as a crucial safeguard in fraud detection, navigating the growing complexity of fraud by incorporating diverse data points such as network and transaction data.
Advancements in Identity Management and KYC
Critically, the future of fintech rests on the continued evolution of digital identity to ensure secure and seamless user experiences and a more transparent and reliable way to manage where your data is being used and for what purpose. Imagine multi-factor authentication with biometrics, device fingerprinting blocking fraudsters, and personalized services tailored to user risk profiles. AI enhances liveness detection within identity verification and KYC processes, fortifying onboarding and verification systems. Leveraging digitized social graphs and connections, AI facilitates better customer experiences and personalized financial recommendations. This paves the way for financial inclusion, offering a cost-effective and secure means for individuals without formal identification documents to access financial services through simple look, touch, or voice commands.
ESG Compliance: Sustainability, Accessibility, and Inclusion
At the core of the financial evolution lies a commitment to inclusivity. In 2024, mobile banking emerges as a transformative force actively reducing the ranks of the unbanked. Environmental, Social, and Governance (ESG) compliance gains prominence in fintech and banking, responding to customers’’ increasing emphasis on sustainable and inclusive financial solutions. Accessibility becomes a crucial aspect of ESG compliance, with banking services mandated to be accessible under the European Accessibility Act by June 28, 2025, which builds on the existing payment account directive that already ensures basic bank account access for all people in the EU. The sector’s mission extends beyond transactions, fostering financial inclusion as a cornerstone of economic empowerment.
Paving the Future of Finance
In the dynamic landscape of 2024, these trends, underpinned by the robust backbone of mobile networks from technology leaders, intertwine to define a future where finance transcends transactional boundaries to become an immersive experience. Technology acts as an enabler, and inclusivity serves as the guiding principle, positioning the mobile financial services industry for a transformative era. We are now entering a landscape where financial services are not just a means to an end but an integral part of an enriching journey toward economic empowerment and inclusion.
[i] https://www.juniperresearch.com/press/digital-wallets-transaction-value-16-trillion-2028
