Financial Technology represents a marriage between technology and financial services. FinTech usually refers to a financial solution that is built upon technology featuring highly innovative and pioneering in nature. Interestingly, non-financial start-ups lead the FinTech ecosystem and have been disrupting the overall financial industry on an end-to-end basis with an emphasis on evolution of consumer financial habits.

Digital-only banks continue to grow in popularity due to advancements in AI, biometrics, online banking, and cybersecurity. Currently, 89% of Americans use mobile banking services, and 70% report that mobile banking is their preferred way to the bank. The neobank sector was valued at more than $30 billion in 2020 and is projected to grow at a CAGR of 47.7% over the next eight years. The global fintech market was valued at $6.5 trillion in 2021 and is estimated to grow at a compound annual growth rate of 13.9% between 2022 and 2028 to reach $16.65 trillion.

For instance, a 6% inflation, 0% real PCE growth world is better for a payments company’s top-line growth than 2% inflation, 2% real PCE growth. A recession impacts real consumption, which is the base layer of payments industry growth. We think about a decline in real personal consumption expenditure as a relatively linear decline in growth across consumer payments companies.

Fintech Ppt Industry Overview And Key Trends

Employment is another key macro factor for the industry, particularly for payroll companies and credit bureaus. There is a linear relationship between employment and payroll growth, similar to real PCE for payments companies. The goods/services spending dynamic is another significant factor in a potential recession as the composition of spending is almost as important as headline nominal PCE growth. The payments industry is more levered to services than goods spending, which we expect should hold up better than aggregate consumer spending in a slowdown. In addition, the ratio of services to goods is still recovering to its normal 55/45 split, which should be a continued, moderating tailwind aiding payments industry growth. 5G is the 5th generation telecommunication standard that provides high speed, reduced or zero latency, wider bandwidth, and improved connectivity.

The report evaluates the evolving FinTech market ecosystem including start-ups, banks, investment companies, insurance companies, and non-financial organizations. The report analyzes the global impact of FinTech and the outlook for specific regions. The demand for fintech has grown fast in recent years and is expected to grow much more throughout the forecast period. This expansion can be attributed to the rising demand for digital financial services such as online payments, digital wallets, mobile banking & online fund transfers for a faster, safe, and seamless customer experience. The fintech technologies market is segmented on the basis of deployment mode, application, technology, end user, and region.

fintech industry overview

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Scope Of The Report

Fintech is allowing companies to cut down their cost, automate their process and reduce the chances of error. AI Chatbots are used by companies as customer assistants for various purposes such as sales, customer care executive , and online chat executive. AI is empowering small finance companies as it is affordable as well as chances of error occurrence is very low. In addition, the insightful details about the cash flow and income and expense is gaining the traction from the end user as this helps companies to reduce their expenses. Main services demanded by our client base are executive searches of the above typology and market intelligence. Given the big demand and churning in certain jobs and functions, global mappings are becoming very popular.

In this blog, we are going to discuss the challenges of the fintech industry in India and the technologies used to solve those challenges. EY teams work with FinTech innovators, incumbents and investors to create the digital future of financial services. The potential for financial innovation is almost limitless and we are helping clients navigate the digital ecosystem to help create long-term value. For this study, Reports and Data has segmented the global FinTech investment market based on product type and technology as follows. In May 2021, Corporate finance software provider LLC has signed a $2.5 billion deal to acquire DivvyPay Inc., better known as Divvy, whose cloud service enables companies to issue business credit cards to their employees. In fact, PayPal is one of the largest fintech companies in the world, and it was also one of the first companies to operate in the space.

fintech industry overview

Approximately 1 billion smartphones will have some type of face unlock in the next years, as Counterpoint foresaw in their whitepaper. Facial recognition and fingerprint verification, which were initially used to unlock phones, are now commonly used to enter into mobile apps and make in-person NFC payments using mobile devices. Nearly 50 years after the electronic payments industry was founded here, the region continues to thrive and innovate. As we navigate an increasingly challenging environment, fintech stocks are already pricing in a combination of recession and/or long-term growth impairment, in our view.

Tech Trends

The report contains analysis of trends in each segment of the market for the period from 2018 to 2028. As of February 2021, there were 10,605 fintech startups in the Americas, making it the region with the most fintech startups globally. In comparison, there were 9,311 such startups in the EMEA region and 6,129 in the Asia Pacific region. Mid-cap and big corporations are competing with the startups by attracting talent and offering attractive benefits like phantom shares. Most modern fintech companies are data-driven and often connected to vast digital networks which deliver new experiences and possibilities for users. This framework provides a great deal of value, but it can also increase the risk of cyberattacks and security breaches.

fintech industry overview

For instance, in the U.S., banks stand by the Dodd-Frank Act, while in Europe MiFID II regulations are considered for businesses under its jurisdiction. As fintech has grown, so have concerns regarding cybersecurity in the fintech industry. The massive growth of fintech companies and marketplaces on a global scale has led to increased exposure of vulnerabilities in fintech infrastructure while making it a target for cybercriminal attacks. Luckily, technology continues to evolve to minimize existing fraud risks and mitigate threats that continue to emerge. A mobile wallet is a type of digital wallet that enables the user to process payments, access account information, and pay for services through a smartphone application. To speed up the entire payment process, the mobile wallet stores details about the payment card on the app itself.

Global Fintech Marketplace: Technologies, Applications, And Services 2022

The global FinTech investment market is expected to reach a considerably large market size in 2028 and register a high CAGR over the forecast period. Industry analysis indicates that rising demand for FinTech investment is driven by changing market trends, which are expected to support industry growth as well as market growth over the forecast period. Financial technology, shortened as FinTech, is a technology that is linked to all financial services. FinTech is an expanding sector that seeks to use technology to boost financial practices. FinTech has been extended to new applications, products, processes, and business models in the financial services industry, including complementary financial services.

fintech industry overview

Companies in this industry undertake operations such as the design, development, publication, distribution, and monetization of role playing game software on personal computers, mobile phones, or gaming consoles. The browser games market consists of sales of browser games and related services by entities that produce browser games that can be played on smartphones, tablets, PCs, and TVs. Online games or browser games refer to games, which are played over the internet. Browser games range from plain text games to games that combine complex graphics and virtual worlds populated simultaneously by several players. They rely solely on the web browser and sometimes on a common plug-in such as Java or Flash.

It is used by end-user organizations on the back end to automate insurance, trading, banking services, and risk management. Finance as a sector includes financial service companies and fintech companies, and the sector juggernauts towards digital transformation with strategic technological trends. Financial Technology, also known as FinTech, is described as the new technology which automates or improves the functioning of financial services.

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This doesn’t mean that consumers shouldn’t trust fintech companies with their money — it just means that being careful can be beneficial. For most consumers, the benefits of working with a fintech company outweigh the perceived risks. Financial companies are adopting digitalization of business processes due to the lockdown measures and to provide user-friendly and reliable platforms to manage financial and business activities. Companies are adopting advanced financial technologies to secure their digital footprints and money transaction processes. Furthermore, the ever-increasing threat of COVID-19 is projected to boost the demand for fintech solutions during the forecast period.

This lack of skilled professionals could impede market growth over the next few years. Embedded finance is the integration of financial services using tech into a non-financial platform. A simple way to understand this is to look at ride-hailing apps like Uber, Lyft, or food delivery apps like UberEats, Zomato, etc. These businesses do not offer financial services but need the ability to receive payments on their platforms. Based on reports, from a $3 billion market size in the year 2020, the global blockchain market value is expected to go up to $39.7 billion by the year 2025. Many would claim that the blockchain is the future of digital finance because of the way transactions are carried out on it without a central authority who controls it and makes the rules.

The blockchain with its decentralized mechanism is panning out to be a great use case for financial services. These platforms have the foundational structure of online banking services built-in and allow users to customize certain elements as per their needs to offer a white-labeled Fintech service. Three parties are involved in P2P lending, a particular kind of alternative lending technology, including a borrower, an investor, and an online third-party platform. As a result, the investor may lend money to the borrower without a bank’s involvement. Since peer-to-peer lending platforms don’t hold the loans themselves, they are less expensive and provide better value. According to Autonomous Research, artificial intelligence would help the banking and finance sectors cut costs by 22% by 2023.

This will be especially true for later-stage companies that will struggle to hit revenue benchmarks to defend high valuations. Existing financial institutions are also looking to expand their solution offerings and innovate their technology. 82% of traditional financial organizations plan to increase their collaboration with fintech companies in the next few years. That is likely because 88% of incumbent financial institutions feel that some of their business will be lost to standalone fintech companies in the next five years. Consumers also demand that they enjoy a more seamless digital experience when it comes to handling their money. Financial companies will have to adapt to this demand if they do not want to lose business.

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This, in turn, has become one of the major growth factors for the fintech technologies market during the global health crisis. Companies in the global fintech market are increasingly using blockchain technology for better security and operational efficiency. Blockchain is a technology which involves the implementation of a distributed database that is accessible to all the users over a network, where each user can add a new data record , with a timestamp that cannot be altered. It enhances trade accuracy, speeds up the settlement process, and reduces risks. As per the Pricewaterhousecoopers FinTech report, by 2020, 77% of financial organizations plan to integrate blockchain into their operations & 90% of payment companies plan to use blockchain by the end of 2020. The fintech sector has had a revolutionary impact on banking, payments, and insurance.

This, as a result is becoming major trends in the global Fintech technologies market. Moreover, financial institutions are increasingly leveraging Fintech solutions to offer convenient digital-only financial offerings that require no physical contact and are increasingly using one platform to provide multiple services online. Information about key drivers, restrains, and opportunities and their impact analysis on the global fintech technologies market size are provided in the report.