FinTech Industry Research And Analysis | TechSci Research
As consumers increasingly turn to digital methods for managing their finances, the fintech industry has been registering significant growth in recent years. The growth of e-commerce, rising smartphone penetration, and the emergence of digital payment options are contributing to the rising fintech market value. According to TechSci Research, In 2020, the global fintech market was valued at USD7301.78 billion, owing to the increasing application of mobile devices and technology-based solutions and rising investments in blockchain and big data. Growing demand for mobile banking applications that allow customers to transact online and transfer money to other users and huge investments by incumbents spurred by competition are supporting the global fintech market growth.
According to some findings, the fintech industry is expected to boost economic growth by 2.2%. Higher digital financial inclusion in payments means increased fintech consumer financing and more financial freedom. In advanced economies, the digital mode of transactions is emerging as the preferred option compared to emerging economies that primarily use cash. However, increasing penetration of smartphones, rapid urbanization, and wide internet connectivity in emerging economies are also boosting the fintech market growth. Additionally, financial institutions collaborate with FinTech firms to enhance customer services and improve operations as merchants increasingly opt for cashless payment methods.
APIs to Dominate the Global Fintech Industry
Based on technology, the global fintech market is segmented into
API, AI, Blockchain, Distributed Computing, and others. In 2021, Application
Programming Interface (API) segment accounted for 37.73% of the market share
and is expected to dominate the global fintech industry by 2027. The emergence
of new applications, services, and business models that allow data access among
parties involved in financial transactions, including banks, third-party
providers, websites, and consumers, is contributing to the segment growth. In
addition, the shift towards open banking and a new generation of innovative and
dynamic companies powered by fintech are supporting the dominance of APIs in
fintech.
Rising Collaborations in the Fintech Industry
The rise of digital ecosystems, regulatory changes, and
increasing customer adoption have led to an increasing number of
collaborations. Fintech companies are forming strategic alliances with banks to
ascertain the credibility of their platform, bigger investment budgets, legal
and regulatory compliance, and risk management. Banks are collaborating with
fintech companies to cater to customers increasingly getting used to the
seamless digital experience. As FinTech companies are moving from just being a
single service provider to providing a whole suite of services, the need for
collaborations is projected to further increase, which is anticipated to
contribute to the global fintech market growth.
Asia-Pacific to Account for Highest Market Share
In 2021, Asia-Pacific accounted for 50.69% of the global fintech
market, owing to the rising tech-savvy population, the emergence of digital
platforms, and increasing investments in the blockchain industry. Besides,
effective regulations by the government and the introduction of digital
currencies are adding to the increasing adoption of FinTech platforms in the
region. Besides, setting up virtual banks, increased adoption of digital
payments, and skyrocketing e-wallet transactions are expected to spur the
growth of the fintech market growth.
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