In 2024, the financial services industry saw various digital advancements across fields, including blockchain and artificial intelligence. finews.asia reviews the top fintech milestones for the year.

Technology has become a critical matter as financial services companies invest billions of dollars to improve client experiences, operational efficiency and other facets of their businesses to adapt to new client needs and new competitors. And in many ways, 2024 was a watershed year for fintech with key advancements in areas such as the usage of blockchain and rapid developments in artificial intelligence.

finews.asia takes a look at some of the top fintech milestones in 2024.

1. Mainstreaming of Crypto

A crypto winter chilled the markets in 2022 and much of 2023 after major scandals including the collapses of Sam Bankman-Fried’s FTX as well as Do Kwon’s Luna and TerraUSD. Many were once again wondering if the promises of a vast universe of use cases by the plethora of cryptocurrencies were worth the risk of extreme volatility and potential fraud.

But in 2024, the crypto markets staged a rebound as confidence returned. The most notable achievement was the digital asset class’ entry into mainstream finance. Numerous asset managers began to create crypto exchange-traded funds which fuelled institutional adoption. Then, the market saw a very sharp surge as the election victory of pro-crypto US President Donald Trump led to even greater optimism and record-breaking price levels.

2025 is expected to be an even better year for the crypto market. According to Sygnum head of research Katalin Tischhauser in a recent report, potential US legislation could be transformative for the industry due to regulatory clarity and «the treatment of Bitcoin as a central bank reserve asset would catalyze unprecedented demand».

2. GenAI Takes Off

Rapid developments in artificial intelligence, particularly generative AI, have spurred many businesses to seek ways to leverage the benefits of the nascent technology. 2024 saw a tipping point in the financial sector as over half of the industry (58 percent) implemented genAI use cases, according to a report by Forrester. Another KPMG report named chatbots as one of the most common use cases in finance.

Despite the hype, this is not enough to move the needle. Greater maturity and quantity of use cases will need to be rolled out in order to deem the AI story a success. And there are challenges beyond oft-cited hurdles like hallucinations and regulations. According to Broadridge’s head of enterprise platforms Joseph Lo, «it’s rare for AI projects to pass the [proof-of-concept] phase» due to organizational hurdles such as prioritization-related issues.

3. Digital Players Make TradFi Inroads

While many fintech companies have found their niche as B2B providers or competitors in decentralized finance, others have historically struggled in traditional finance in areas such as banking or wealth management. But 2024 proved to be a cornerstone year for such players.

In Hong Kong, ZA Bank became the city’s first virtual lender to report a monthly profit in July, though no figures were disclosed. In 2023, all eight of Hong Kong’s licensed virtual banks were unprofitable, according to a report by the local regulator.

In Singapore, Standard Chartered-backed Trust Bank became the city-state's fourth largest retail lender by number of customers with over 800,000 alongside deposits nearing S$3 billion ($2.2 billion). In digital wealth management, Endowus also broke records after its assets under management reached an all-time high of $7 billion from more than 200,000 individuals, family offices and institutions.

4. Asset Tokenization

In contrast with cryptocurrencies, the tokenization of traditional assets is still in its early days. According to the Monetary Authority of Singapore, there are many benefits to asset tokenization such as the elimination of settlement risk, duplicative reconciliation and increased efficiency, though there has yet to be success in achieving scale.

Nonetheless, 2024 was still an important year as many firsts were achieved. UBS launched Hong Kong’s first tokenized warrant in February and the Swiss bank’s first tokenized fund in November. HSBC brought physical assets to the digital realm by introducing tokenized gold to retail clients in March.

«The tokenization of assets, once fully embedded, will be a much more efficient way of transacting and settling,» Standard Chartered CEO Bill Winters previously said. «As the ecosystem is built, I can imagine that the vast majority, if not all, of certain asset classes will traded in tokenized forms.»