Fintech (financial technology) is a word that refers to cutting-edge digital technology that aims to improve financial services and banking. In the financial industry, cutting-edge advancements like blockchain and artificial intelligence are ushering in new methods of conducting business. Digital currencies, banking, insurance, personal loans, and wealth management are just a few of the industries that are undergoing a digital makeover.
The financial sector has been buzzing for the past five years about the disruption fintech companies are making by offering consumers alternatives to established solutions. The tide is turning, according to statistics. Established businesses are more aware than ever of the possibilities and importance of these new technologies.
The financial technology sector is one of the fastest-growing in the world, with an average annual growth rate of over 25%. According to the most recent fintech data, the industry will be worth over $310 billion by 2022 if current trends continue. So, while fintech isn’t yet among the top ten worldwide revenue industries, it’s on its way. Is investing in fintech a smart idea? What are the top fintech companies? All of the answers, as well as some additional nerdy info, can be found here.
Fintech Statistics
- A large percentage of traditional financial firms (88 percent) expect part of their income to be lost to independent fintech firms during the next five years.
- In the first half of 2020, fintech businesses received $25.6 billion in funding from around the world.
- digital banking is gaining traction: 46% of consumers only utilise digital channels for their financial transactions.
- To enhance client retention, 77 percent of conventional financial institutions aim to expand their attention on innovations.
- Digital payments’ overall transaction value increased from $4.1 trillion in 2019 to $5.2 trillion in 2020.
- From $4.1 trillion in 2019 to $5.2 trillion in 2020, the overall transaction value of digital payments increased.
- Investors who want to capitalize on emerging trends — i.e., electric vehicles or remote work — may want to check out “thematic” exchange-traded funds. These ETFs provide a way for investors to engage in so-called thematic investing, which generally means buying stocks or other investments that may benefit from a particular trend (source)
By 2022, the Fintech Sector is Estimated to be worth $310 Billion
In 2018, the industry garnered $128 worth of investment from throughout the world. Experts predict that the industry’s compound annual growth rate (CAGR) will be 25%. In other words, $310 billion is expected to be invested in the sector by 2022. In 2018, fintech businesses got more than half of the $254 billion in yearly venture capital financing.
By 2022, North America will have the most Financial Startups
North America has the most fintech startups, whereas Asia has the most revenue-generating fintech businesses. There are 8,775 financial services startups in North America, according to statistics. There were 7,385 people in EMEA (Europe, the Middle East, and Africa), and 4,765 in APAC. (Asia-Pacific). It’s amazing to observe how the number of fintech companies has skyrocketed by 2020. In North America, Europe, and the Asia Pacific, respectively, there were about 5,600, 3,500, and 2,800 newly founded fintech in 2018 and 2019.
There are 79 Unicorn Fintech Firms throughout the World as of January 2021
A unicorn company is a privately owned firm with a market value of $1 billion or more. Decacorns are valued at over $10 billion, while hectares are valued at over $100 billion. As of the beginning of 2021, there were over 500 unicorn firms valued at a total of $1,780 billion. According to data, six new fintech unicorns earned this prestigious status in January 2021.
The Global X Fintech ETF’s Per-Share value more than Quadrupled from $15 in 2016 to $47 in 2022
Investors can have access to fintech investment opportunities through the Global X Fintech fund. The stock’s share price and overall health have been steadily rising in value, with no signs of decreasing in the near future.
Stripe, Located in San Francisco, is the most Valuable Financial Technology Company in the United States, with a Market Capitalization of $35 Billion.
Stripe began as a payment processing service for small businesses in 2011. Among the company’s current clients are Facebook and Amazon. As a result of these high-profile hires, Stripe’s value has climbed to $35 billion.
Ripple, a $10 billion payment protocol and exchange network provider, is the second-largest company, with a market valuation 3.5 times that of the next-largest company.
By 2022, Artificial Intelligence will have saved the Insurance Sector $1.3 Billion.
Fintech’s disruptive potential has generated a lot of discussions. Artificial intelligence plays a major role in this. Computers can automate post-accident data collection, analyze photos of accident scenes, and perform a number of other activities in the insurance industry, allowing insurers to handle claims faster and for less money. Savings of $1.3 billion are expected by 2021.
By 2022, Digital Wealth Management Firms with a Retail Focus are Anticipated to have $600 Billion in Assets under Management
The majority of this expansion has come from existing financial institutions. This is due to the fact that emerging fintech businesses frequently provide low- or no-fee stock trading and robo-advisor services, resulting in lower profit margins.
Established businesses are also beginning to adopt this business model, thus the future of these startups is questionable.
Asian Businesses have a Long Track Record of Success Across the World
Because most worldwide leaders are headquartered in Asia, it appears that the Asian market dominates the global financial technology sector. With a $16 billion value, Paytm deserves to be mentioned among the finest. The online payment method originated in India and has recently grown in popularity. With a $14 billion value and investors such as SoftBank and Uber, Grab is another worldwide leader. Grab is a ride-hailing, food delivery, and digital payment service company founded in Singapore.
According to global fintech statistics, GoJek, which is based in Indonesia, is another of the top fintech companies. This ride-hailing and online payment firm have received a $12 billion valuation. No fintech, on the other hand, comes close to the Ant Group of China. Remember this name the next time you’re curious about the world’s largest Fintech firm. It has a current market capitalization of $131 billion dollars. This comes as no surprise given that the Ant Group owns Alipay, the country’s largest digital payment network with over a billion users.
