Fintech is the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance. The use of smartphones for mobile banking, investing, borrowing services, and cryptocurrency are examples of technologies aiming to make financial services more accessible to the general public. Financial technology has been used to automate insurance, trading, banking services, and risk management.
The start of FinTech dates back to 1866 when the first transatlantic cable was successfully laid, providing fundamental infrastructure for the period of intense financial globalization from 1866 to 1913. The first electronic fund transfer system operating with the help of the telegraph and Morse code was done in 1918. Later on, in the ’50s the public was introduced with credit cards, thanks to Diners club and later American Express. The switch from analog to digital brings us the first ATM machine by Barclays in 1967 which marks the beginning of modern FinTech. In 2008, due to the financial crisis, people started distrusting traditional banking services and fresh players started emerging. In 2009 the Bitcoin appeared followed by other cryptocurrencies. Computers are now commonly used, and smartphones became the primary means to access the web and therefore different financial services. This is increased even higher with the introduction of Google wallet and later Apple pay. The majority of Fintech Market Share belongs to the Insurance sector. You can find Fintech Market Size, Fintech Market Share, and other trends and statistics below and you can learn more about T4's strategy consulting services here.
The chart shows the Fintech Market Size from 2018 to 2022. In 2019, the size of the Fintech Industry was $159B and is projected to grow 25% in 2020. From 2018 to 2022 the Fintech Industry growth is projected to average 25% per year. Over the years the Insurance sector has emerged as a leader in Fintech market share. These estimates were made before the Coronavirus (COVID-19) pandemic. The short term impact of COVID-19 on the Fintech market growth will likely be High because the outlook of many fintech organizations will also be driven by the product category they are in. The negative impact of COVID-19 will be more severe for those in fintech in international payments, unsecured and secured consumer lending, small business lending, and for those where risks may be highest. It is believed that those fintech firms focused on B2B banking are less vulnerable as a group. In Lending, there will be difficulties in the short-term prospects as consumers and businesses miss payments or default altogether. Technology Providers will benefit from the deployment of digital solutions to meet consumer demand. The long term impact of COVID-19 on the Fintech market growth beyond the COVID-19 pandemic will likely be Medium because the outlook for some of the product categories is the same for both traditional banks as well as fintechs, but the smaller non-traditional firms will not have as much capital to absorb the negative financial forces. In payments, retail POS payments will continue to be negatively impacted by the slow recovery in spending at businesses globally. The P2P digital payments will continue to be strong as consumers opt for digital alternatives as opposed to cash or cards. High-ticket payments will be the hardest hit, as travel and large consumer purchases will be slow to recover. In Deposits and Savings, there will be growth due to consumer behavior that shows a growth in account openings and money being saved, but the fintech provider category may not participate in this growth due to an overall lack of trust. In Investment Services, fintech firms will have high usage numbers as consumers continue to react to extreme market changes. As for Technology Providers, they were some of the early winners when COVID-19 hit as traditional banking organizations scurried to deploy digital solutions to meet consumer demand. Request help with obtaining the source for this data and learn more about T4's strategy consulting services here.
The chart shows Fintech Market Share in 2017. The Fintech Market is Fragmented among many industries. The leading Industry in the Fintech Industry was Insurance with 56% market share in 2017, followed by Banking & Capital Markets with 24% Fintech market share, Real Estate with 15% Fintech market share, and Investment Management with 5%. Get help with market research for the Fintech market, including the source for this Fintech Market Share chart and learn more about T4's strategy consulting services here.
FinTech growth is driven by the increase in the use of mobile banking applications for digital payments or other banking applications, the rapid adoption of cutting edge technologies across the financial services industry, such as digital payments and money transfers, financial software and automation, and alternative lending and funding platforms. The major growth drivers of the Fintech industry are the increase in the use of mobile applications for digital payments, digitalization of financial services, the rising number of payment options at retailers, tapping into the emerging markets’ middle class which means digital-only strategies with highly scalable platforms that have most of their costs are in the initial software development and infrastructure buildout and later little incremental cost per customer, the expansion of FinTech beyond traditional financial services such as payments firms offering marketing, operations, and human resources software.
Learn about T4's Consulting servicesFintech is a Developing market composed of many industries. Insurance market share was 56% of the Fintech market in 2017. The number of startups providing support in insurance customer acquisition (such as online platforms for insurance sales, and lead generators) are running at the same level as those in insurance operations. Personal insurance startups are dominating the Industry with more than double the number of new ventures devoted to commercial lines. Banking & Capital Markets market share was 25% of the Fintech market in 2017. In banking and capital markets, the total number of startups began its decline in 2013, and in the deposits and lending space that number actually soared between 2013 and 2014. Real Estate market share was 15% of the Fintech market in 2017. In real estate, the number of startups fell after 2014, but fintechs in leasing and purchase-sale transactions jumped significantly in 2015 though the numbers in the sector overall were down. Investment Management market share was 5% of the Fintech market in 2017. Real estate startups focusing on property development and management dwarf the number of fintechs launched to target financing and investing or leasing and purchase-sale transactions.
T4's research team can help you learn more about the Fintech industry with market analysis, competitive analysis, commercial Due Diligence, and other market research needs. This includes deeper analysis on competitors in the Fintech market, including: Ant Financial, Qudian, SoFi, Avant, Klarna, Adyen, Xero, Lufax, ZhongAn, Oscar, Tala, Pitchbook; research into related topics such as Alternative Financing, Alternative Lending, P2P Payments, Digital Payments, Mobile Payments, (UPI) Unified Payments Interface, Financial Services Software, InsurTech, Personal Finance, Banking & Insurance, Cryptocurrency, Stock Exchange; or additional support in the Technology, Banking & Insurance, Investment, Real Estate Sector or other Sectors. Learn more about T4's strategy consulting services here.
