Fintech Innovators: 3 Stocks Disrupting Traditional Banking

Stocks to buy

The financial technology sector is highly dynamic, and it is growing at a rapid pace. With the adoption of digital assets, cashless payments, and cryptocurrencies, fintech companies are booming. They have set an excellent track record and are growing at an impressive pace. These companies aim to make purchases easier, integrate multiple services under one platform, and allow quick transactions. The year 2024 will be all about fintech innovation, and if you want to enjoy the ride, consider these three fintech stocks to buy. They have the potential to disrupt traditional banking and have already set an example this year. With that in mind, let’s take a look at the three fintech stocks. 

Visa (V)

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One of the top fintech stocks to own, Visa (NYSE:V) is a global leader and is here to stay. The company serves more than 100 million merchants and has an excellent business model which helps keep the operating costs low while generating revenue. Whenever you use a Visa card to facilitate a payment, the company will earn a fee. It has strong financials and the revenue and net profit are steadily growing.

The net income was up 11% year over year while the payments volume increased by 9% for the nine months ended September 2023. It is not missing any chance to grow the business and has invested money to employ artificial intelligence in the business. The company is steadily investing in profitable projects and this has helped it generate steady returns year after year. It has a business model which will continue generating cash in the coming years. 

What’s truly amazing is that the company is thriving, in good times and bad. This stock will bring stability to your portfolio and will ensure steady growth. The company has an impressive operating margin and this is what sets it apart from its competitors. It is hard to find a business with such margins and a strong global position. 

Trading at $258 today, V stock is up 24% year to date and is ready to hit a new 52-week high. Visa isn’t cheap but with this company, you get what you pay for. It is one of the largest global companies with a stable balance sheet. It also enjoys a dividend yield of 0.80% and has recently announced a quarterly dividend of $0.52. 

Affirm (AFRM)

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The growing popularity of Buy Now, Pay Later has already given a boost to Affirm (NASDAQ:AFRM). It had an excellent Black Friday and could have a solid holiday season. The company recently announced that its services have been expanded to Walmart (NYSE:WMT) customers who will now be able to pay over time at all the self-checkout kiosks of Walmart. 

While BNPL was considered a fairly new concept, it is picking up today and enables consumers to own their favorite products without having to delay or forego the purchase. Its partnership with Walmart shows that consumers are looking for convenient payment methods, and there could be many more partnerships shortly. 

AFRM stock is up 439% year to date and it is only getting started. As we head into 2024 and consumer spending improves, Affirm could soar higher. It is exchanging hands for $49 right now and is set to hit a new high very soon. Besides Walmart, it already has partnerships with two of the biggest retailers, Amazon (NASDAQ:AMZN) and Shopify (NYSE:SHOP). Its quarterly results are proof of how fast the company is growing.

In the first quarter results, the company reported a net revenue of $496.5 million, up 37% year over year, and a net loss of $171.8 million, lower than the loss of $251 million in the prior period. It aims to report a profit in the coming year, which could be a huge milestone for the company. Affirm is one of the most innovative fintech stocks to own.

I believe Affirm is one of the best BNPL players in the industry and it will have a solid 2024. Buy the stock before it soars to new highs. 

SoFi Technologies (SOFI)

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When we talk about fintech innovators, we must not miss out on SoFi Technologies (NASDAQ:SOFI). The company is an innovator in a true sense and has transformed the banking experience for many. It has become a one-stop shop for consumers and offers banking, investing, and lending under one umbrella.

SOFI stock is up 18% in the past six months and is exchanging hands for $9.71 today. I believe the resumption of student loan payments will play a significant role in the success of SOFI. 

Someone who has to pay the student loan may consider applying for a personal loan with SoFi, or they could open a credit card. The banking sector was turbulent in 2023 and this is when consumers started moving towards SoFi. It has seen a notable deposit growth which proves that consumers think SoFi is safer than a traditional bank. Since it is an online-only model, the cost of operation is low, and the company is targeting users of every age group. 

It added 717,000 users in the third quarter and aims to add 1 million members quarterly in 2024. While it may seem ambitious, it looks highly possible to me. The company has a strong market share and is only getting started. As the economy improves, we could see SoFi do even better. The fintech stock looks highly undervalued to me. 

SoFi is growing at a significant rate and the management aims to achieve profitability in 2024. It has seen incremental revenue growth in the recent quarter, and I believe the momentum will continue. 

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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