Fintech, the abbreviation for financial technology, is a broad category that refers to the innovative use of technology in the design and delivery of financial services and products. The application of fintech cuts across multiple business segments, including lending, advice, investment management and payments. Many fintech companies harness mobile technologies, big data and superior analytics to tailor products for various customer segments. The proliferation of Open Banking standards could have a transformative impact on financial services in the coming years. Open Banking – a framework wherein banks open up their APIs and enable third parties to access customers’ financial data in order to provide new services – provides greater transparency to consumers, while also lowering the barriers to entry for new players.

Fintech industry overview

Due to customer behaviour, e-commerce is one of the most significant growth factors in fintech, with a CAGR of 10–12%. In the next decade, AI would control 95 percent of all customer interactions, with customers preferring technology interaction over human interaction. Consumers in 64 percent of countries have used one or more fintech platforms, up from 33% in 2017. When it comes to managing their money, customers expect a seamless digital experience. Time is of the essence, since many of these new companies are rapidly accumulating market share.

For this to happen, we count on all those who have a stake in fintech to do their part in the coming weeks and months. In 2021, FT Partners published the first edition of our Women in FinTech report. We featured 31 exclusive interviews with female CEOs, Founders, Executives and Investors in the FinTech space including…

General Fintech Statistics

Forming partnerships and industry alliances is one fintech trend that can help bring new technologies to broader adoption and work out implementation kinks. Reaching out to other companies and finding areas to work on together can improve customer relationships and user experience. As Krishna noted, organizations have to figure out implementation gaps and understand customer needs.

The last report in 2017 predicted that only 52% of consumers worldwide would have adopted fintech services in 2019, but the estimate proved to be too conservative as the actual figure overshot it by 12 points. In 2019, 64% of consumers have used two or more fintech services or platforms. Additionally, recent fintech statistics show that the COVID-19 pandemic has contributed to the acceleration of cloud services and similar solutions for the industry. As such, it makes sense that the usage of FinTech will only increase in the coming years.

Moreover, manually intensive payment methods are more likely to lead to high error and failure rates, making companies vulnerable to security risks and increasing costs. Consequently, the rush is on to bring more efficient, digital payment solutions to businesses, both large and small. The phrase “I’ll Venmo you” is now a replacement for “I’ll pay you later.” Venmo, of course, is a go-to mobile payment platform. In addition to Venmo, popular payment companies include Zelle, Paypal, Stripe and Square.

Fintech industry overview

Being able to predict where markets are headed is the Holy Grail of finance. With billions of dollars to be made, it’s no surprise machine learning has played an increasingly important role in fintech. Incumbent financial institutions and fintechs are, at the moment, the best of frenemies. As technology redefines convenience, traditional ways of thinking, especially in investments, are increasingly proving to be difficult.

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Fintech market share across 48 fintech unicorns is worth over $187 billion as of the first half of 2019, or slightly over 1% of the global financial industry. The nature of fintech Fintech industry overview leads analysts to categorize it into two sectors. These are the “fins”, which are fintech companies with a B2B model, and the “techs”, which are B2C fintech companies.

Fintech industry overview

Based on region, North America is expected to provide lucrative opportunities for growth in the fintech market share due to the rising adoption and development of advanced technologies in the fintech sector. Asia-pacific will grow the fastest due to rising investments and favorable banking/regulatory policies. Based on type, The AI segment will provide lucrative opportunities for growth in the fintech market share due to the growing use of AI interfaces, chatbots for efficient customer service.

Financial Technology, or “FinTech,” has become the industry’s great disruptor; it’s a disruptive revolution that has transformed everything and everyone. Additionally, the report includes an in-depth interview with Andrew Robbins, the founder and CEO of Paytronix. This license allows all the employees of an enterprise to access the PDF. “Fintech and other emerging disruptive technologies generate excitement, but with the disruption comes changes to existing architecture and the creation of new implementation and deployment challenges.” “There’s been progress to help regulators keep pace with and even foster blockchain innovation,” says Krishna.

Things You Need To Know About Fintech

Blockchain technology will grow the fastest during the forecast period. On September 24, 2020, FT Partners hosted a live VIP video conference call focused on the rapid rise of stablecoins and the massive potential implications for the global financial infrastructure. The panel featured leaders in the digital asset space from Circle, Compound, Digital Currency Group and Visa. Panelists provided perspective on fundamental value propositions for programmable currencies, regulatory trends, new markets like Decentralized Finance , and the aggregate transformative impact for businesses and individuals globally. Following the broader session, Jeremy Allaire, CEO of Circle, provided further insights on the role of Circle Platform Services as an accelerant to the adoption of stablecoins and perspectives on USDC, the fastest-growing regulated stablecoin. New FinTech platforms continue to gain market share globally, particularly among younger, tech-savvier consumers who don’t require physical branches and are drawn to their lower fees and user-friendly apps.

China’s online payment market is dominated by three services that make up 66% of all digital transactions made in China , which make up 29%, 19.5%, and 17.6% of the market, respectively. Peer-to-peer or digital lending, another segment of fintech, is worth $43.16 billion in 2018 and expected to rise to $567.3 billion in 2026 with a CAGR of 26.6%. New alliances between FinTech startups, technology companies, and existing financial institutions have sprung up as a result of these expectations. According to recent fintech figures, the COVID-19 pandemic has aided the industry’s adoption of cloud platforms and related solutions. FinTech is one of the few industries that brings together two traditionally male-dominated fields – finance and technology. However, many companies in finance, technology, and FinTech are recognizing the importance of diversity in the workplace.

Technology has, to some degree, always been part of the financial world, whether it’s the introduction of credit cards in the 1950s or ATMs, electronic trading floors, personal finance apps and high-frequency trading in the decades that followed. Astrid Eira is a resident B2B expert of FinancesOnline, focusing on the SaaS niche. She specializes in accounting and human resource management software, writing honest and straightforward reviews of some of the most popular systems around.

  • Peer-to-peer or digital lending, another segment of fintech, is worth $43.16 billion in 2018 and expected to rise to $567.3 billion in 2026 with a CAGR of 26.6%.
  • While insurtech is quickly becoming its own industry, it still falls under the umbrella of fintech.
  • Though blockchain and cryptocurrency are unique technologies that can be considered outside the realm of fintech, in theory, both are necessary to create practical applications that move fintech forward.
  • Today, checks still shockingly account for nearly 50% of B2B payments.
  • Fintech has caused an explosion in the number of investing and savings apps in recent years.

As the automotive industry continues to innovate, consumers and businesses will expect the financial services and processes surrounding this massive industry to modernize and adapt as well. Similarly, as new advances change the way consumers and businesses use cars, both traditional financial services and FinTech companies can distinguish themselves by offering new, innovative solutions. The traditional credit industry is transforming as strong growth in eCommerce and technological innovation pave the way for the proliferation of alternative payment methods, including buy-now-pay-later (“BNPL”) options. BNPL payment methods increase consumers’ purchasing power and financial flexibility through installment payment plans typically offered at 0% APR.

While incorporating new financial technology creates risk, proactive executives can find a wealth of opportunity to use risk to create value. With a large, rapidly-growing population and several of the world’s fastest-growing economies, Africa represents a large and attractive market opportunity for FinTech companies given its relatively underdeveloped financial services ecosystem. Fintech is a portmanteau of the terms “finance” and “technology” and refers to any business that uses technology to enhance or automate financial services and processes.

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Both start-ups and traditional finance companies are active in fintech. In a new World Economic Forum paper, business leaders from around the world urge a societal debate and proactive standard setting around fintech, or financial technology. On December 17, 2020, FT Partners hosted a live VIP video conference call on Challenger Banks. The panel featured executives from Square, Varo, Dave, Upgrade, and MoneyLion, who provided their perspectives on the state of play in the digital banking space as well as the outlook for 2021 and beyond. “There’s broad recognition that the technologies can be used to solve certain problems, but financial operations and services are complex.

Fintech industry overview

This report is an in-depth examination of the dramatic changes sweeping across the wealth management industry. Consequently, there has been a groundswell of FinTech companies bringing digital capabilities to the traditional wealth management industries. Startups have a little regulatory leeway, but there’s only so far they can go, solo, with their own platforms.

The COVID pandemic has been a major catalyst, forcing restaurants to adopt new technologies in order to respond to changing consumer preferences…all the while providing seamless experiences. In particular, restaurants must adapt to an omni-channel environment as e-commerce has taken hold, similar to what retailers have been dealing with for many years now. The report also profiles other players in the space including gohenry, Kard, Mozper, Revolut, Monzo, Tinkoff and Varo. On January 6th, FT Partners brought together some of the top minds in the industry to discuss the State of FinTech Investing in 2022. We addressed a wide range of topics, ending the hour with a better view of the setup for the rapidly expanding FinTech investment landscape in 2022 and beyond.

Regulators Are Showing Interest In Fintech

This will account for 88 percent of all financial transactions in the future. This year, 90 percent of smartphone users would make a mobile payment. The proposed actions also make a lot of sense, according to people familiar with the matter. Andy Haldane, for example, the chief economist at the Bank of England, told the Financial Times that the recommendations were “very sensible ones”. But of course, all that goodwill must at some point move towards concrete measures. The challenge remains to translate similar insights into careful scrutiny and action.

Which Region Has The Highest Market Share In The Fintech Market?

This should encourage heightened levels of innovation and competition in financial services, while also enabling banks to partner with and provide services to FinTech companies, rather than competing directly with them. Open Banking principles have also enabled the rise of Embedded Finance, which empowers any company to offer financial products directly to their customers in their core platforms or apps. Financial services are poised for transformative change; mega-corporations and startups alike are pouring money into fintech investments. They’re embracing the agility and flexibility promised by fintech solutions to develop innovative financial products that help people manage their money in new ways.

Neobanks are essentially banks without any physical branch locations, serving customers with checking, savings, payment services and loans on completely mobile and digital infrastructure. Fintech, a portmanteau of “financial technology,” is the application of new technological advancements to products and services in the financial industry. 42% of consumers say that since the pandemic started, they have used mobile banking apps as their primary banking solution.

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Each report is continually updated by the FT Partners Research Team with the latest information, facts and metrics to provide our readers with the most up-to-date and comprehensive subject matter. The latest version of each report is provided below along with a brief overview of the report contents. The Fintech market is segmented on the basis of type, application, and region. Authorize.Net is a payment gateway system that expedites transactions anywhere and on any platform.

Fintech Market Report Coverage

In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see /about to learn more about our global network of member firms. “US regulators are actively watching but giving space for the players to figure things out.

FT Partners’ FinTech Insights Reports are published on a quarterly basis, along with a comprehensive year-end FinTech Almanac. All information included in the reports is sourced from FT Partners’ Proprietary Transaction Database, which is compiled by the FT Partners Research Team through primary research and data analysis. The reports feature M&A, financing and IPO statistics and trends as well as breakdowns by FinTech vertical, geography, investor-type and much more. The business-to-business market remains one of the last major global opportunities for payment digitization. Not only is the market still plagued by widespread manual processes and inefficient payment methods, but it is also a massive market estimated at nearly $29 trillion in the U.S. alone. Today, checks still shockingly account for nearly 50% of B2B payments.

With cutting-edge hardware, software, and networks, fintech entices consumers to flock to its camp in droves, and incumbents are forced to follow suit. Brazil is in the midst of a FinTech revolution as the confluence of a number of forces has created a very fertile environment for innovation and disruption across various financial, technology and business services. Fintech is also overhauling credit by streamlining risk assessment, speeding up approval processes and making access easier. Billions of people around the world can now apply for a loan on their mobile devices, and new data points and risk modeling capabilities are expanding credit to underserved populations.