According to reports by ResearchandMarkets, high usage of mobile devices and technology-based solutions is pushing the demand for financial and banking solutions which can be accessed through personal devices.
Banks and firms are investing heavily in technology-based solutions, competing with contemporary FinTech companies. This is the key growth driver for the global FinTech market, which will be pinned at approximately USD 305.7 billion by 2023, at a CAGR of 22.17 percent between 2018-2023.
The various services provided in the FinTech sector are Regtech, payment/billing, insurtech, money transfer/remittance, mortgage/real estate, and others (lending, capital market, wealth management). Among these segments, the payment/billing services segment is expected to drive major growth in the global market, leading to a revenue generation of USD 207.11 bn by 2023.
This growth can be attributed to contactless cards and the emergence of retail-focused FinTech companies looking to expand the use of this functionality by taking it to every corner of commerce. The popularity of payment apps like GoUrl, Cayan, Stripe, and Amazon Pay amongst customers and retailers will further drive the market. Regtech is also expected to grow extensively at a CAGR of 22.05 percent, after payment/billing. This is mainly due to the advent of new regulations pertaining to FinTech sector.
Major technologies involved in the FinTech sector are artificial intelligence (AI), Blockchain, cryptography, biometrics and identity management, cyber-security, and robotic process automation (RPA). Significant growth will be witnessed in areas of AI and Blockchain, attracting major investments during the forecast period, 2018-2023. AI interfaces and chatbots have primarily redefined customer service, and its growing popularity will enable AI-oriented FinTech market to expand at a CAGR of 21.72 percent during 2018-2023, followed by Blockchain-based FinTech companies.
North America is the leading contributor to the global FinTech market and the market is expected to reach USD 80.85 Bn by 2023. However, the pace of growth in the Asia-Pacific (APAC) region is anticipated to be the highest, at a CAGR of 43.34 percent during 2018-2023. The growth can be attributed to an increasing number of start-ups catering to most of the financial areas, including banking, insurance and wealth management. China, Japan, South Korea, Australia, and India are the key contributing countries. Latin America, on the other hand, is slowly emerging as one of the prominent regions in terms of FinTech development, majorly driven by initiatives in Mexico and Brazil.