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The fintech market is estimated to grow at a CAGR of 20.5% between 2022 and 2027. The size of the market is forecast to increase by USD 277.22 billion. The growth of the market depends on several factors, including the influence of digitalization, the integration of big data and artificial intelligence in Fintech, and innovation and development.
This report extensively covers market segmentation by application (on-premise and cloud), end-user (banking, insurance, securities, and others), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global fintech market as a part of the global technology hardware, storage, and peripherals market within the overall global information technology market. The parent global technology hardware, storage, and peripherals market covers manufacturers of cellular phones, personal computers, servers, electronic computer components, and peripherals. It also includes data storage components, motherboards, audio and video cards, monitors, keyboards, printers, and other peripherals. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The influence of digitalization is notably driving market growth, although factors such as privacy and security concerns may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Fintech Market Driver
The influence of digitalization is notably driving market growth. The demand for smart connected devices is growing rapidly worldwide owing to the internet revolution. Managing, monitoring, and maintaining information security in the organization has also become both essential, and complicated. Thus, the demand for M2M communication will increase during the forecast period as it helps financial service providers significantly improve their business processes and make effective decisions in real time. The increase in the number of connected devices around the world is a major factor driving the demand for FinTech software.
Due to the digitization of companies and processes, there is a large number of complex and diverse data sets in the world. In addition, due to the use of advanced and versatile machines and equipment, the data and contents produced by organizations are diverse, versatile, and complex. With embedded analytics technology, organizations can transform unstructured and semi-structured information into structured information. FinTech software helps in the business processes of the organization, which is expected to further boost the growth of the global market during the forecast period.
Significant Fintech Market Trend
The growing popularity of blockchain is an emerging trend in the market. Blockchain is considered the most popular bitcoin wallet in the world. Many banks choose this technology to perform various tasks such as authentication processes or to verify documents in the banking system.
Blockchain technology helps the banking system process various financial transactions, helping financial institutions save billions. This is done through internal financial transactions and also by clarifying the cost structure. Banks are expected to rely on blockchain technology during the forecast period, as the countless potential benefits of blockchain technology help facilitate business transfers at significantly lower costs and minimal decentralization. This, in turn, boosts the potential growth of the market during the forecast period.
Major Fintech Market Challenge
Privacy and security concerns are major challenges impeding the market. In many developing countries the concept of online payments is emerging. Mass market customers are not aware of the benefits of using such technologies. The adoption of fintech business models and platforms is low despite the high penetration of the internet.
Payment service providers collect personal data about customers so that they can tailor advertising messages and target their advertising to key target groups. Such practices help providers gather information about customer profiling, behavior, and data mining. However, arbitrary use of this information may violate the privacy of the customer. Location-based services also have data protection issues, as such offers and services operate on the basis of real-time geographic data. Since smartphones are used for financial transactions in real-time, data theft can lead to financial losses for consumers and reputational losses for service providers. Such risks make consumers hostile to online shopping and pose a potential threat to the global market during the forecast period.
Key Fintech Market Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Fintech Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Adyen NV - The company operates under one segment. The company under this segment offers financial technology with products such as payment platforms and other financial products. The key offerings of the company include financial technology.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the on-premise segment will be significant during the forecast period. In 2022, the on-premise segment holds the largest share of the global fintech market, as on-premise deployments enable the real-time monitoring of fintech software, ensuring the complete security of transactional data.
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The on-premise segment was valued at USD 41.18 billion in 2017 and continued to grow until 2021. In the cloud-based deployment model, data are stored on multiple servers, whereas in the on-premise deployment model, data are stored on dedicated servers. This offers good control and security over information. Large financial institutions that deal with multiple transactional information daily prefer on-premise fintech software solutions, as they provide an optimum level of data security with physical access controls and security protocols. Furthermore, on-premise deployments provide a secure environment during regular software updates. Therefore, this segment is estimated to expand during the forecast period.
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APAC is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
APAC is the fastest market for fintech owing to its high growth potential, coupled with faster adoption of technologies such as blockchain across industries and an influx of SMEs. In addition, growing economies are the largest adopters of distributed ledger technologies, thus creating multiple opportunities for startups in the financial market to fundamentally redefine their business and operational models. Therefore, the higher adoptions of distributed ledger technologies aided by the growing penetration of the internet and smartphones helped vendors of the BFSI industry to launch distributed ledger technology (DLT) platforms, fostering further the growth of the fintech market in APAC during the forecast period.
The COVID-19 pandemic had a favorable influence on the fintech market in APAC in 2020. Owing to the pandemic, governments in many nations, imposed nationwide lockdowns, forcing people to stay at home. As a result, consumers in this region had to adopt the cashless mode of transactions, such as mobile-based payment or other modes of online payment, instead of using cash. This, in turn, resulted in the increased downloads of online payment apps, leveraging further growth of the fintech market in APAC in 2020. Moreover, the easing of lockdown restrictions owing to large-scale vaccination drives in different countries in APAC, coupled with increased funding toward the development of software and IT infrastructure in 2021, led to the gradual growth of the fintech market in APAC.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Application (On-premise and Cloud), End-user (Banking, Insurance, Securities, and Others), and Geography (APAC, North America, Europe, South America, and Middle East and Africa).
Fintech Market Scope |
|
Report Coverage |
Details |
Page number |
153 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.5% |
Market growth 2023-2027 |
USD 277.22 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
20.12 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 39% |
Key countries |
US, India, China, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Acorns Advisers LLC, Adyen NV, Affirm Inc., AlphaSense Inc, Avant LLC, Barker Brooks Communications Ltd., Camden Town Technologies Pvt Ltd., CLYDE TECHNOLOGIES, INC, Earnest Fintech, FinTech Sandbox Inc., International Business Machines Corp., Microsoft Corp., PayPal Holdings Inc., SIGMOIDAL LLC., SoFi Technologies Inc., Stripe Inc., Upstart Network Inc., Fundrise LLC, and Alphabet Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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