The financial services industry is undergoing a transformative shift driven by disruptive technologies such as artificial intelligence, blockchain, and alternative lending.
Incumbents are realizing the advantages of embracing digital processes and are either launching their digital services to compete with tech-savvy startups or forming partnerships and acquisitions to leverage their capabilities.
The Fintech Industry: Industry Analysis
If you work in the Financial Services industry, you can gain valuable business insights on the latest tech innovations, market trends, and your competitors through data-driven research.
In recent years, there has been a significant surge in fintech activities, encompassing technology-driven disruptions in financial services.
Both established financial companies and startups are incorporating artificial intelligence (AI) and other technologies into their daily operations as consumers increasingly adopt alternative digital methods for managing their finances.
This digital shift in the industry should not be overlooked by investors.
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Here are some key statistics about the Fintech Market:
The Fintech World: Industry Analysis and Stats
The Global Fintech Market is projected to grow at a compound annual growth rate (CAGR) of around 20% over the next four years.
By 2025, the market value is expected to reach approximately $305 billion, according to GlobeNewswire.
This year has marked a significant turning point for the fintech sector, as the line between fintechs and traditional financial services has become increasingly blurred.
Nearly every established financial institution is now focusing on innovation to compete with fintechs, driven by the competition intensified by the coronavirus pandemic.
As a result, incumbents actively invest in, acquire, and collaborate with fintech rivals.
If you’re interested in learning more about Insider Intelligence’s leading Financial Services research, click here.
With consumers gravitating toward digital financial management methods, digital-only banks and fintechs have emerged as threats to traditional banking institutions.
Some of the notable fintech companies in the world include:
- Monzo: 251 to 500 employees, total funding of $356 million.
- Starling Bank: 501 to 1,000 employees, total funding of $354 million.
- Robinhood: 501 to 1,000 employees, total funding of $1.2 billion.
- Mint: 5,001 to 10,000 employees, total funding of $31.8 million.
- Coinbase: 251 to 500 employees, total funding of $547.3 million.
- SoFi: 1,001 to 5,000 employees, total funding of $2.5 billion.
Here are some notable trends in the fintech industry:
- Big Tech companies like Amazon, Google, and Microsoft are venturing into wealth management and developing the digital infrastructure required for this sector. According to Capgemini, almost three-quarters of global high-net-worth individuals express a willingness to adopt wealth management services from big tech firms.
- Robo-advisor adoption is expected to grow, presenting opportunities for both fintechs and established financial institutions. Insider Intelligence predicts that robo-advisors in North America will increase their assets under management (AUM) from $330 billion at the end of 2019 to $830 billion by 2024.
- The rising adoption of fintech will drive national regulatory initiatives, particularly in China and across the globe. This will enhance the competitiveness of China’s advanced fintech ecosystem, as the pandemic has accelerated the shift of financial services online to better serve consumers. Chinese regulators are likely to investigate and better understand major fintech companies’ activities in response to this growing fintech use.
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