Fintech Market

The global fintech market size was valued at USD 7.94 Billion in 2022 and is projected to reach USD 114.37 Billion by 2031, expanding at a CAGR of 34.5% during the forecast period, 2023-2031.

The growth of the market is attributed to the wide availability of advanced technology and financial solutions, high penetration of Internet of Things (IoT), and growing popularity of online payment. Fintech or financial technology refers to the integration of advanced technology to facilitate convenient and effective delivery of financial services for businesses or consumers.

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The improvement of financial service reflects the idea of providing better consumers’ experience in financial-related activities and with the introduction of innovative technology, a company can now easily foster to shape a “consumer-centric” approach of business operations.

A fintech offers companies to automate their financial processes and strengthen its operations by using robust software and specialized tools. Facilities such as mobile banking, automated portfolio managers, peer-to-peer payment services or trading platforms including cryptocurrencies are key examples of fintech services.

Unlike traditional methods, a fintech includes several innovative activities such as wide integration of mobile applications, upgrade of software, and development of consumers’ oriented financial business.

As the financial services transform rapidly, these fintech companies are widely offering various services but remain focus on four key areas such as digital payments, alternative financing, digital wealth management, and digital lending.

Several fintech companies have emerged to offer specialized functions or key targeted areas by using cutting-edge technologies such as Artificial Intelligence (AI), data analytics, blockchain, robotic process automation, and application programming interface (API). With these integration of advanced technology, a company can easily boost its overall business performance by ensuring a secured and effective services to consumers.

The outbreak of the COVID-19 pandemic has adversely affected the global economy but helped in acceleration of the expansion of the fintech industry. In a view to fight against the virus spread, several financial service providers had to align or collaborate with various technology supplying companies to convert the pandemic into new market opportunities.

With the constraint revenue of majority of companies during the pandemic, these business enterprises had to consult with key financial service providers to help stabilize and return to safe financial positions.

Fintech Market Trends, Drivers, Restraints, and Opportunities

• Massive wave of digitalized financial services and rising number of consumers using smart electronic devices such as smartphones and laptops present key factors driving the market.
• Rapid expansion of ecommerce and online platforms along with the wide use of mobile wallets and digitalized money further propel the market.
• Wide use of advanced technology and devices such as AI and blockchain system to secure payment and other financial activities between clients and service providers are expected to boost the market in the coming years.
• Issues concerning to data security and users’ privacy and increasing cyber threat related to online transactions are major challenges that can hamper the market expansion.
• Increasing R&D investments in technology advancement and favorable government policies towards the development of innovative financial solutions are offering lucrative opportunities of the market.

Scope of Fintech Market Report

The report on the global fintech market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Fintech Market Segment Insights

Technology Segment Analysis

Based on technology, the global fintech market is divided into blockchain, AI, distributed computing, API, and others.

The AI segment held a major share of the market in 2021 and is projected to expand at a rapid pace during the forecast period owing to wide adoption of the technology for minimizing risks and enhancing capacity of fraud detection in payment methods or any financial transactions of consumers.

AI helps in effective and accurate analysis of data, offering insightful information for business performance, and improve real-experience of consumers. On the other hand, the blockchain segment emerges as a fast-growing market domain and is expected to account for a large market share in the coming years owing to massive use of the technology in cryptocurrencies such as Etherium, Bitcoin, and DogeCoin.

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Deployment Modes Segment Analysis

On the basis of deployment modes, the market is bifurcated into cloud-based and on-premises. The cloud-based segment is anticipated to hold a key share of the market in the coming years due to rising demand for platforms having the facility of large data storage capacity and availability of cost-effective services.

On the other hand, the on-premise segment is expected to register a robust growth rate in the coming years owing to easy accessibility and management of the technology deployment within an organization.

Services Segment Analysis

Based on services, the global fintech market is segmented into digital payment, neobanking, personal finance, fund transfer, wealth management, loans, insurance, and others. Digital payment was worth more than USD 6799.45 billion in 2021 and is expected to have over 5,200 million users by 2030.

The segment is anticipated to dominate the market in the coming years owing to increasing number of smartphone users globally and wide access to internet or mobile banking for various payment methods. The surge in the use of digital payment has been influenced by the rapid expansion of e-commerce retail services and rising consumers’ inclination towards online shopping.

End-Users Segment Analysis

On the basis of end-users, the market accounted for a major share of the market in 2021 and is segregated into insurance, banking, securities, & others. The banking segment is projected to register a considerable CAGR during the forecast period due to the presence of well-established commercial banks and emerging neobanking system from startups.

Banking facilities such as e-wallets and digital payment are widely used by consumers that allows secure methods of financial transactions. With the integration of upgrade technology, banks help in delivering easy and convenient financial services to consumers and enhancing their banking experiences.

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Regional Analysis

In terms of regions, the global fintech market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia is a fast-growing market and held a key market share in 2021.

The market of Asia Pacific is projected to register a high CAGR during the forecast period due to the presence of large number of Gen Z and millennial population and favorable governments’ policies towards the establishment of globally leading fintech companies.

In 2020 alone, the region has witnessed the rising development of more than 1200 fintech applications especially for the use of mobile phones and several players have invested over USD 250 million for the expansion of new users.

Moreover, increasing establishment of various commercial financial institutions, impacted by urbanization and wide awareness of various mobile banking facilities among a large number of consumers present another key driver of the regional market.

On the other hand, the market of North America is expected to constitute a key share of the market during the projected period owing to early adoption of advanced technology and wide acceptance of innovative technology for financial services.

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Segments

The global fintech market has been segmented on the basis of

Technology

• Blockchain
• AI
• Distributed Computing
• API
• Others

Deployment Modes

• Cloud-based
• On-premises

Services

• Digital Payment
• Neobanking
• Personal Finance
• Fund Transfer
• Wealth Management
• Loans
• Insurance
• Others

End-users

• Insurance
• Banking
• Securities
• Others

Regions

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Google Payment Corp.
• Paypal Holdings, Inc.
• Tencent Holdings Ltd.
• Avant, LLC
• Robinhood Markets, Inc.
• Afterpay, Limited
• Nexi SpA
• One97 Communications Ltd.
• Ant Group Co. Ltd.
• Klarna Bank AB
• Social Finance, Inc.
• Adyen NV.
• Qudian Inc.

Competitive Landscape

Key players competing in the global fintech market are Google Payment Corp.; Paypal Holdings, Inc.; Tencent Holdings Ltd.; Avant, LLC; Robinhood Markets, Inc.; Afterpay, Limited; Nexi SpA; One97 Communications Ltd.; Ant Group Co. Ltd.; Klarna Bank AB; Social Finance, Inc.; Adyen NV.; and Qudian Inc.

Some of these key players actively engage in the implementation of various market development strategies such as acquisition and mergers, fund raising, and massive R&D investment to enhance their market positions. For instance,

• In March 2018, a China-based internet service provider, Tencent Holdings Ltd. and Allianz X, the digital investment unit of Allianz Group co-led the Series C Funding for Berlin-based neobank, N26. It was one of the largest equity financing rounds for a fintech company in Europe, which laid a vision for strategy growth globally.