FINTECH INDUSTRY MARKET ANALYSIS

FinTech is a combination of ‘finance’ and ‘technology’. It refers to the technology that helps consumers and financial institutions deliver financial services in an affordable and effective manner. In the FinTech industry, consumers can manage their financial transactions, transfer money, and can make quick lending decisions. Digital lending, credit, mobile banking, mobile payments, crypto currency, block chain, trading are examples of fintech.

In addition, the increasing adoption of digital payment among millennial is expected to drive market growth during the forecast period. A mobile wallet is a type of digital wallet that enables users to access account information, process payment, and pay for services through smartphone applications. Mobile wallet stores have details of payment card on the app itself to make the payment process simpler and convenient. For instance, according to Coherent Market Insights analysis, the mobile payment industry is expected to reach US$195,000 million by 2021 from US$ 115,000 million in 2019.

Global FinTech Industry Market - Impact of Coronavirus (Covid-19) Pandemic

COVID-19 pandemic had a significant impact on the FinTech Industry market. Several countries across the globe such as India, Italy, the U.K., and others imposed nationwide lockdown in 2020. Many European countries such as Germany, Spain, and the U.K. also faced the second wave of the COVID-19. These lockdown across many countries increased the use of remote services such as online shopping, entertainment, streaming services, and mobile payments, which has boosted the adoption of FinTech Industry. In addition, many countries such as the U.K., Germany, Ireland, Poland, and Egypt have raised limits on the size of contactless payments.

North America is expected to hold dominant position in the global fintech industry market during the forecast period.

Statistics:

North America held dominant position in the global fintech industry market in 2019, accounting for 32.92% share in terms of value, followed by Europe, and Asia Pacific.

Figure 1: Global FinTech Industry Market Share (%), By Region, 2019

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North America held dominant position in the global fintech industry market in 2019 and is projected to retain its dominance throughout the forecast period, owing to trend of digitalization and adoption of advanced technologies such as blockchain and artificial intelligence. In addition, major companies in North America are adopting strategies such as acquisition of small companies for increasing the service offering in the region. For instance, in November 2017, JPMorgan Chase & Co., a U.S.-based investment bank and financial services holding company acquired WePay, an online payment services company. Through this acquisition, JP Morgan Chase & Co. was able to offer WePay Payment Technology to its four million small business clients

Major companies operating in the global fintech industry are: Corporate Card for Spend Management Platform:  Air Canada, AirPlus International Ltd., American Express Company, Bank of America Corporation, Citigroup Inc., Diners Club International Ltd, East West Bank (East West Bancorp, Inc.), JP Morgan Chase & Co. Inc., Mastercard Incorporated, NIUM Pte. Ltd, the UPS Store, Inc., and Tradeshift.

Spend Management/Spend Analytics Solutions Providers: Advanced, Airbase Inc., Ariba, Inc. (SAP SE), Brex Inc., Coupa Software Inc., GEP, Open Financial Technologies Pvt Ltd, Procurify, Ramp Business Corporation, Sage Intacct, Inc. (The Sage Group PLC), Sievo, SutiSoft, Inc., TOUCHSTONE GROUP PLC, VA Tech Ventures Pvt. Limited (Happay).

Among offering segment, the Neo & Challenger Banking Services sub-segment is expected to dominate the market during the forecast period owing to increase in number of digital transactions.

Neo banks are digital banks, which do not have any physical presence and operates through partnered bank license in the market. Neo banks provide digital payment solutions, remittance, and money transfer services, saving accounts, insurances, and mortgages only through mobile applications, which is boosting the adoption of Neo banks across the globe. Furthermore, the coronavirus pandemic has fueled the adoption of Neo banks in the North American region. According to Coherent Market Insights’ analysis, the number of Neo Bank customers is expected to increase up to 145 million by 2024.

Figure 2: Global FinTech Industry Market Value (US$ Mn), 2017 - 2027

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The global fintech industry market was valued at US$ 208.01 Mn in 2019 and is expected to reach US$ 382.38 Mn by 2027 at a CAGR of 7.05% between 2020 and 2027.