Global fintech and funding innovation ecosystem

A16z’s 2024 Big Ideas for Fintech, AI and Crypto

Innovation | Dec 6, 2023

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Image: Unsplash/Brad Switzer

A16z insights for 2024 highlight a future where these technologies become a fundamental part of society and converge to create more efficient, creative, and secure systems

As we step into 2024, A16z has furnished us with their annual big idea predictions of the future with the landscape of fintech, AI, and crypto being poised for transformative change. Fintech is increasingly becoming developer-driven, reshaping the industry's infrastructure with a focus on enhanced user experiences and open-source innovation. This shift not only empowers fintech companies but also positions them to better serve community and regional banks, revolutionizing financial services with advanced software solutions.

In the realm of AI, we're witnessing a significant leap in healthcare, where AI-enabled platforms are set to overhaul outdated systems, promising more efficient and effective patient care. The democratization of creativity through AI is another milestone, breaking down barriers in artistic expression and design. Moreover, the interpretability of AI models is becoming a focal point, ensuring these technologies are not just powerful but also understandable and controllable.

Last Year:  a16z: Big Fintech Ideas to Tackle in 2023

Crypto, no longer confined to financial niches, is emerging as a fundamental component across various sectors. Its integration with AI, the evolution of gaming economies, and advancements in verification methods like SNARKs. From enhancing the authenticity of digital content to revolutionizing smart contract development, crypto is set to become more accessible, secure, and integral to technological and societal systems.

The Future of Fintech and AI

The Rise of the Developer in Financial Services

  • Developers are becoming key influencers in the purchase of financial services infrastructure, and the trend is reshaping how financial services infrastructure is bought and sold, favoring fintechs that prioritize a great developer experience.  Fintech companies are increasingly focusing on creating developer-friendly environments, including open-source solutions and developer sandboxes.

"For fintech companies that pride themselves on a great developer experience, this will play to their advantage." - Angela Strange, General Partner at Andreessen Horowitz

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Empowering Community and Regional Banks

  • Fintech tools are poised to help community and regional banks compete with larger banks. These tools will assist in managing balance sheet risks and improving client services. This is particularly crucial as one-third of small business bank lending is provided by regional banks.

Revolutionizing Financial Professional Services

  • The professional services in financial sectors, such as accounting, tax advising, and wealth management, are set to be transformed by generative AI and LLMs. These technologies will automate tasks like data collection, research, and report generation, shifting the human role towards specialized expertise and client engagement.

AI-Enabled Healthcare Platforms

  • AI is expected to revolutionize healthcare by enabling value-based care. The integration of AI in healthcare, which currently relies on outdated technologies like pagers and fax machines, is set to improve efficiency and patient care significantly.
Unsplash Jr Korpa creativity - A16z's 2024 Big Ideas for Fintech, AI and Crypto

Image: Unsplash/Jr Korpa

Democratizing Creativity with AI

  • Generative AI is transforming the creative process, making it accessible to everyone. This technology enables rapid prototyping and ideation across various forms, including text, visual, and audio. In 2024, these AI tools are expected to make creative expression even more widely accessible.

AI in Robotic Process Automation (RPA)

  • AI is set to enhance RPA systems, making them more intelligent and adaptable. This advancement will allow for more robust solutions in automating repetitive tasks across different industries.

AI Interpretability

  • As AI models are deployed in real-world situations, understanding their decision-making process becomes crucial. The focus in 2024 will be on reverse engineering AI models to understand their outputs and control their actions.

"The big question is: why do these models say the things they do? Why do some prompts produce better results than others?" - Anjney Midha, General Partner at Andreessen Horowitz

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Image by Freepik

The Future of Crypto

These insights from a16z for 2024 highlight a future where crypto is not just a financial tool but a fundamental part of various technological and societal systems, from gaming to brand identity and beyond.

See:  CRA Tax Implications for Individuals and Crypto Platforms

The integration of AI, the evolution of gaming economies, and the advancement in verification methods are set to redefine the landscape of crypto, making it more accessible, secure, and integrated into our daily lives.

Decentralization and Governance

  • Decentralization is key for democratizing systems, promoting competition, and user choice. However, achieving it at scale has been challenging.  New models for decentralization are emerging, accommodating richer applications and effective governance, potentially leading to unprecedented levels of decentralized coordination and innovation.

User Experience in Crypto

  • The complexity of crypto UX has been a barrier to mainstream adoption.  Developers are testing new tools to simplify crypto UX, such as passkeys for easier app sign-ins, smart accounts, embedded wallets, and advanced RPC endpoints.  These innovations could make crypto UX more user-friendly and secure than current web2 standards.

AI and Blockchain Integration

  • Decentralized blockchains can counterbalance centralized AI, creating global markets for compute and data contribution.  This integration could democratize AI, making it more accessible and safer for consumers.

"Crypto technology can be used to open the black box; track the origin of things we see online." - Andy Hall, Professor at Stanford.

See:  PayPal’s Blockchain Vision As New Financial Rail

Evolution of Play-to-Earn Gaming

  • The shift from 'play to earn' to 'play and earn' in gaming.  To create games that are fun and allow players to capture value.

Formal Verification in Smart Contract Development

  • The complexity and critical nature of smart contracts demand robust verification methods.  New tools are emerging, improving the developer experience and leveraging smart contract architectural simplicity for robustness.

See:  GBBC Publishes Latest Blockchain Law Journal Volume VII

NFTs as Ubiquitous Brand Assets

  • Established brands are increasingly using NFTs as digital assets.  Starbucks' gamified loyalty program and Nike's digital collectible NFTs.  NFTs are poised to become widespread digital brand assets.

SNARKs Going Mainstream

  • SNARKs (Succinct Non-interactive ARguments of Knowledge) provide a way to verify computational workloads.  Recent improvements are making SNARKs more usable and viable for various applications.

Outlook

Together, these developments in fintech, AI, and crypto signal a future where technology is not just an enabler but a driver of efficiency, creativity, and security, reshaping how we interact with and benefit from these advanced systems in our daily lives.


NCFA Jan 2018 resize - A16z's 2024 Big Ideas for Fintech, AI and CryptoThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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