New Economy Trends for 2024: All Assets That Apply and Investment Insights

Table of Contents

• The Continued Rise of AI and Machine Learning
• The Growth of Cryptocurrencies and Digital Assets
• The Rising Importance of ESG Investing
• The Personalization of Financial Services
• The Expansion of Cloud Computing
• The 5G Revolution
• The Biotech Breakthrough
• The Rise of Alternative Investments
• The Importance of Regulatory Technology
• The Digital Payments Transformation

The asset and wealth management landscape is undergoing rapid change driven by technological innovation. As we look ahead to 2024, several key trends are poised to shape the industry:

The Continued Rise of AI and Machine Learning

Artificial intelligence and machine learning have already begun transforming asset and wealth management, but their capabilities will expand greatly by 2024. Key applications include:

• Algorithmic trading based on advanced quantitative models and natural language processing of news/data.
• Hyper-personalized portfolio management using AI to analyze client data and deliver tailored advice.
• Streamlined compliance and oversight through regulatory technology (RegTech).
• Predictive analytics to forecast economic conditions and optimize strategic decisions.

Leading technology companies at the forefront of AI like Nvidia and Google as well as firms specializing in fintech AI such as DataRobot and Ayasdi are well-positioned to capitalize on this trend.

The Growth of Cryptocurrencies and Digital Assets

Cryptocurrencies like Bitcoin and Ethereum have experienced massive volatility, but the underlying blockchain technology promises to enable a new paradigm for digital finance. Key developments include:

• Wider mainstream adoption of cryptocurrencies for payments and transactions.
• Expansion of decentralized finance (DeFi) networks allowing crypto-denominated lending/borrowing outside traditional finance.
• Tokenization of assets through non-fungible tokens (NFTs), fractionalized ownership, and embedded digital rights.

Major cryptocurrencies like Bitcoin, Ethereum, and Solana are poised to gain ground, as are “picks and shovels” blockchain companies like Coinbase, Square, and Silvergate Capital.

The Rising Importance of ESG Investing

Environmental, social, and governance (ESG) factors are becoming essential metrics for evaluating investments and driving capital to more sustainable companies. Trends by 2024 include:

• Increased flows into ESG-focused mutual funds, ETFs, and indexes as assets under management continue growing 20-30% annually.
• Mainstreaming of ESG data/scores in investment analysis and financial research by firms like MSCI and Sustainalytics.
• Strengthened ESG reporting requirements for public companies and financial institutions.

Top ESG funds such as iShares ESG Aware and pension funds like CalSTRS are embedding sustainability into their investment processes.

The Personalization of Financial Services

Advanced data analytics and artificial intelligence are enabling more tailored financial services customized to each client's unique needs and situation. Key developments include:

• Hybrid digital/human advisory services combining robo-advisors with personal financial advisors.
• Fractional share investing allowing smaller trade sizes customized to individual portfolios.
• Customizable, automated portfolios based on specific investment areas of interest.

Firms like Wealthfront and Betterment are using big data to personalize investing and automated advice platforms. Robinhood offers hyper-customizable fractional share investing.

The Expansion of Cloud Computing

The public cloud services market is forecast to grow 15-20% annually, enabling the distribution of financial services through cloud platforms and driving remote work/operations. Key advancements include:

• Proliferation of cloud-native fintech/RegTech applications using services like AWS, Microsoft Azure, and Google Cloud.
• Increased use of cloud infrastructure for security, data accessibility, and scalability by financial institutions.
• Cloud communications and productivity software facilitating remote work and virtual collaboration.

Leading cloud providers like Microsoft, Amazon, and Google are major players in enabling these advancements.

The 5G Revolution

The rollout of high-speed 5G networks will impact finance and investing by massively accelerating data transmission speeds, reducing latency, and powering connectivity of technologies like smartphones, IoT devices, and cloud platforms. Key implications include:

• Sophisticated mobile apps and trading platforms performing in real-time across 5G networks.
• Seamless integration of systems across financial institutions for instant intraday transactions/updates.
• Enhanced cybersecurity and fraud prevention through 5G-enabled data analysis.

Telecom infrastructure firms with strong 5G networks like Verizon and T-Mobile will be leaders in this trend, as will mobile chipmakers like Qualcomm and Marvell Technology.

The Biotech Breakthrough

Advances in biotech, genomics, and telemedicine are disrupting healthcare while enabling more customized medical treatments and therapeutics. Important developments include:

• Targeted cell/gene therapies, immunotherapy, and biosimilars improving disease treatment and survival rates.
• Direct-to-consumer telemedicine expanding access to preventative care and routine health services.
• DNA sequencing unlocking genetics-based personalized medicine and health insights.

Leaders in biotech and telemedicine like Teladoc Health, Exact Sciences, Illumina, and Intellia Therapeutics are at the forefront of this transformation.

The Rise of Alternative Investments

Institutional and retail investors alike are increasing allocations to alternative investments like private equity, hedge funds, managed futures, and real estate for enhanced portfolio diversification. Key drivers include:

• Increased accessibility through fintech platforms and fractional investing.
• Platforms opening private markets to qualified retail investors.
• Indexes and liquid alternatives ETFs providing access to hedge fund strategies.

Firms democratizing alternative investing like iCapital Network, Moonfare, and Artisan Partners are capitalizing on this trend.

The Importance of Regulatory Technology

Financial institutions are adopting next-gen regulatory technology (RegTech) to automate compliance processes including customer ID verification, transaction monitoring, regulatory reporting, and data management. Major factors include:

• Rising complexity of global financial regulations.
• Increased regulators' focus on governance and oversight of fintech/digital assets.
• Leveraging AI and cloud technology to prevent fraud and ensure compliance.

Leaders in developing RegTech like Chainalysis, ComplyAdvantage, and Ascent help institutions navigate this shifting landscape.

The Digital Payments Transformation

Fintech innovation is driving rapid growth in digital payments, banking, and financial transactions through platforms like mobile wallets, peer-to-peer apps, and embedded finance. Key shifts include:

• Explosive rise of mobile payments through apps like Apple Pay, Google Pay, Venmo, and CashApp.
• Embedded financial services via apps allowing in-app banking, lending, and stock trading.
• Cryptocurrency adoption making payment transactions faster, cheaper, and more global.

Incumbent financial institutions are challenged by new entrants like PayPal, Square, Affirm, and cryptocurrency exchanges offering innovative payment/transaction capabilities.

The asset and wealth management landscape in 2024 will be defined by these technology-driven trends. Investors and financial institutions that align their strategies and investments around these new economy tailwinds are positioned for success. With sound analysis of secular shifts and adaptable portfolios, the opportunities are boundless in this fast-evolving environment.