Fintech Market: Snapshot
Fintech or financial technology is the new technological innovation that serves the purpose of traditional microfinance methods using the latest technologies. The Internet revolution has stroked trends such as cryptography, block chains, and social trading. These emerging technological traits in the financial sector has also introduced challenges such as data security and fraud prevention, especially in the cryptocurrency segment. However, the rapid innovations in the sector are expected to nullify the restraints in the fintech market.
The digital revolution is disrupting the relationship between the banking sector and its customers. In an environment composed of fully-digital banking transactions and flourishing e-commerce industry, the global fintech market is assumed to witness mindboggling profits in the near future. According to Forbes, the disrupting cryptocurrency market is capped at $8.5 trillion. This proves the investment trends over the world has changed astonishingly. Worldwide, around $27.4 billion of investment has been recorded into fintech start-ups in 2017.
According to Antonio Guterres, the present secretary general of the United Nations, “innovation in technology has aided in the expansion of financial inclusion and has recorded a massive acceptance from around 1.2 billion people in just six years (2012-2018).” The United Nations has proposed an exclusive task force on digital fintech industry to achieve the Sustainable Development Goals. Governments across the planet are proposing various regulations for the adoption of the digital economy to optimise operations in the global fintech market.
According to a recent IndustryARC market research report, the global fintech market size is valued at around $140 billion to $150 billion as of 2018. Considering the current trend, the market revenue of the fintech market is anticipated to grow at an incredible CAGR of 25% to 30% during the forecast period of 2019 to 2025. The astounding acceptance of e-commerce market has proved to be the most profitable application for the fintech market and is projected to grow at a positive CAGR of 10% to 12% during the aforementioned forecast period.
The North American region grabs the largest market for the fintech sector, with a market share of more than 35% as of 2018. The region grabs the largest market because of the saturated trend of the digital economy in the region. Services offered through the internet at people’s mobiles and portable devices is also a growth driver in the fintech market.
The information presented is deduced from the report titled “FinTech market: by technology(API, AI, blockchain, distributed computing, cryptography) by type of transaction (digital transaction, business finance, personal finance) by sector (lenders, payments, wealth management, financial institutions, insurance) by service (financing, asset management, payments) by ventures (competitive fintech ventures, collaborative fintech ventures), by geography – forecast (2018-2023).”
Fintech Market Companies: Recent Developments
Some of the key players influencing the global market are:-Ant Financial, ZhongAn, Oscar, Qufeng, Avant, Lufax, Atom Bank, Kreditech, Kabbage, JD Finance, SoFi, Nubank, Klarna, Square, Funding Circle
The HSBC bank has teamed up with Tradeshift, a business commerce platform to manage assistance for the working capital and global supply chain associated with their client companies. The companies have merged to develop an integrated proposition which is projected to offer a fully automated and digitalized process for transactions. This acquisition is expected to drive considerate profits to the fintech market.
The JD finance is the financial technology arm of JD.com, they have established multiple business lines such as asset management, crowdfunding, payment solutions and so on. The company is a leading financial technology giant with innovative products such as baitiao, JD wallet, JD Finance APP, JD Microcredit and so on. They built the Chinese financial technology ecosystem for consumers and enterprises.
The fintech market is growing rapidly owing to the presence and innovations of advanced technology. Banking, insurance, and e-commerce sector are the major growth drivers for the fintech market. Huge investments and developments in online based transaction practices have engulfed massive profits in the fintech sector. According to IndustryARC’s analysts, the market revenue for the fintech market is expected to escalate exponentially in the near future.
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