FinTech Blockchain Market

Global FinTech Blockchain Market Size (2023 to 2028)

The global FinTech blockchain market is expected to grow from USD 1.99 billion in 2023 to USD 34.91 billion by 2028, at a stunning growth rate (CAGR) of 77.4% from 2023 to 2028.

FinTech Blockchain merges financial technology with blockchain, a decentralized ledger system. It revolutionizes finance by leveraging blockchain's decentralized structure, enhancing transparency, security, and efficiency in financial operations. This fusion birthed cryptocurrencies, digital tokens, and smart contracts, transforming how transactions occur. Cryptocurrencies like Bitcoin and Ethereum emerged as digital assets running on blockchain, allowing secure, peer-to-peer transactions globally. Smart contracts automate agreements, executing without intermediaries. This synergy addresses financial inclusion, bridging gaps for the unbanked. FinTech Blockchain disrupts conventional finance, fostering faster, cheaper, and more accessible financial solutions, reshaping banking, payments, and asset management, and promising innovative possibilities for the future of finance.

Global FinTech Blockchain Market Drivers:

The introduction of advanced technologies in the financial sector has greatly improved its efficiency. FinTech blockchain applications are those that are in high demand in the financial sector. The applicability of the fintech blockchain is seen in smart contracts, payments, and compliance / KYC management that benefit insurance companies, banks, and investment banks. This helps reduce infrastructure costs and improves your work efficiency. The increasing importance of FinTech blockchain applications in non-bank financial services is also expected to provide a boost in this market.

In the FinTech Blockchain market, the pivotal drivers of enhanced security and transparency have catapulted blockchain technology to the forefront. Blockchain's decentralized and cryptographic architecture fortifies the financial ecosystem against threats, establishing a robust defense mechanism. Transactions executed on a blockchain are imbued with transparency, ensuring a comprehensive and unalterable record of financial activities. This innate transparency not only fosters trust but also acts as a formidable deterrent to fraudulent activities and unauthorized interventions. The immutable nature of blockchain transactions further solidifies the integrity of financial data, mitigating risks and elevating the overall security posture. As the financial industry navigates an era of rapid digitization, the symbiotic relationship between security and transparency in blockchain technology continues to reshape and fortify the foundations of FinTech, fostering a more resilient and trustworthy financial landscape.

Within the market, cost efficiency emerges as a potent catalyst, reshaping the financial landscape. Blockchain's integration in financial transactions initiates a transformative wave by eradicating intermediaries and optimizing processes, resulting in substantial cost savings. The advent of smart contracts amplifies this efficiency, embodying self-executing agreements where contractual terms are encoded directly into the blockchain. This automation minimizes reliance on manual intervention, reducing operational overhead and expediting transactional workflows. As financial institutions seek streamlined operations and heightened cost-effectiveness, the adoption of blockchain technology, coupled with the power of smart contracts, stands as a pivotal strategy.

The growing market capitalization of cryptocurrencies and the initial supply of foreign exchange (ICO), the growing demand for distributed accounting technology and the adoption of technologically advanced blockchain solutions in various financial statements, such as investment banking, commercial banks and Insurance companies are some of the main factors driving the growth of the global fintech blockchain market.

The growing adoption of fintech and blockchain technologies in the insurance industry is further boosting the growth rate of the global market. While insurance companies suffer huge losses due to bogus claims and scams that occur every day in the industry, most players are implementing technologies such as blockchain in their workflow. For example, according to the study by SAP's digital transformation executives, banking and insurance executives are further planning to double their blockchain investments by 2019. The blockchain provides transparent information on transactions, creating a sense of trust, as the department responsible for verifying the authenticity of the claim and deciding how many claims can be covered always needs a reliable data repository. Due to the rapid advancement of technologies, such as IoT, the amount of data created by the many connected devices is increasing and therefore requires technology capable of processing a large volume of data. With blockchain, insurance companies can manage large and complex networks by having devices communicate and manage with each other, securely, rather than building an expensive data center to handle the processing and storage load. Self-management of these devices is significantly cheaper than the data center model and is therefore expected to drive the market in the future.

Global FinTech Blockchain Market Restraints:

Technological complexity stands as a formidable barrier to the global fintech blockchain market growth as the implementation and maintenance of blockchain solutions demand specialized knowledge, posing a challenge for the market, particularly smaller enterprises. The intricacies inherent in blockchain, from consensus mechanisms to smart contract execution, can be daunting, dissuading some businesses from venturing into this transformative technology. The need for specialized expertise not only contributes to higher implementation costs but also introduces a learning curve that smaller entities may find prohibitive.

Also, in the ever-evolving FinTech Blockchain market, a critical hurdle lies in the realm of education and awareness. The full potential of blockchain technology is hindered by a pervasive lack of understanding among stakeholders and decision-makers. The intricate nature of blockchain, coupled with its transformative capabilities, demands a concerted effort to bridge the knowledge gap. Insufficient awareness about the technology's benefits may impede its widespread adoption in the financial sector. Elevating awareness not only enhances the industry's technological literacy but also fosters a climate conducive to the integration of blockchain, propelling the FinTech sector toward a more innovative and sustainable future.

Impact of COVID-19 on the global fintech blockchain market:

The COVID-19 pandemic has exerted adverse and favorable influences on the FinTech Blockchain market. On the downside, the economic uncertainties triggered by the pandemic initially led to cautious spending and delayed technology adoption, impacting the FinTech sector. The disruption in global supply chains and heightened financial market volatility created an environment where some businesses were compelled to sideline non-essential technology investments, including blockchain solutions. However, the pandemic also catalyzed digital transformation. The accelerated shift towards online transactions and remote financial services emphasized the need for secure and efficient technologies, spurring interest in blockchain. As businesses sought resilient solutions, blockchain's transparency and security features gained renewed attention, positioning it as a strategic tool for navigating the challenges posed by the pandemic and fostering innovation in the FinTech space.

REPORT COVERAGE:

This research report on the global FinTech blockchain market has been segmented and sub-segmented based on provider, application, organization size, vertical and region.

Global FinTech Blockchain Market - By Provider:

• Middleware Providers
• Application and Solution Providers
• Infrastructure and Protocol Providers

The application and solution providers segment held the major share of the worldwide market in 2022. The application and solution providers are often more visible and directly interact with end-users. They dominate the FinTech Blockchain Market demand as they offer ready-to-use solutions tailored to specific financial needs. Their dominance is driven by the demand for user-friendly interfaces and specialized functionalities, addressing specific business requirements.

The middleware providers segment is anticipated to grow at a healthy CAGR during the forecast period. Middleware providers act as intermediaries, facilitating communication between different software applications. Their dominance is a result of the increasing need for streamlined communication and data flow between diverse financial systems.

Global FinTech Blockchain Market - By Application:

• Exchanges and Remittance             
• Smart Contract     
• Payments, Clearing, and Settlement          
• Compliance Management/KYC     
• Identity Management

The payment, clearing and settlement segment has emerged as particularly dominant in the FinTech Blockchain market. Due to the decentralized and transparent nature of blockchain technology facilitates secure, real-time, and cost-effective transactions, reducing reliance on traditional intermediaries. Hence, this dominance is fuelled by the drive for efficiency and speed in financial transactions.

The exchanges and remittance platforms segment acts as the second leading in the global market, also it leverages blockchain to enhance cross-border transactions, offering faster settlement times and reduced costs.

Global FinTech Blockchain Market - By Organization Size:

• Large Companies
• Small And Medium-Sized Companies

The large enterprises segment is predicted to hold the largest share of the global market during the forecast period. The dominance of the large enterprises segment is primarily attributed to substantial financial resources, enabling them to invest in and implement complex blockchain solutions. Large enterprises are often early adopters, leveraging blockchain for diverse applications, including supply chain management, payment processing, and identity verification.

The SMEs segment had a considerable share of the worldwide market in 2022 and is predicted to grow at a notable CAGR during the forecast period. While SMEs is the second lead in the FinTech Blockchain Market growth as blockchain technology matures and becomes more accessible, SMEs are increasingly recognizing its potential benefits in terms of cost efficiency, transparency, and security.

Global FinTech Blockchain Market - By Vertical:

• Banking Services
• Non-Bank Financial Services
• Insurance

The banking segment stands out as the most dominant industry vertical in the worldwide market. Banks are actively exploring blockchain for a range of applications, including cross-border payments, trade finance, and supply chain finance. The decentralized and transparent nature of blockchain enhances security and efficiency in banking operations, making it a preferred technology for digital transformation in this sector.

The non-banking segment also plays a second important role in the FinTech Blockchain Market which includes entities like FinTech startups, investment firms, and peer-to-peer lending platforms that are increasingly adopting blockchain. However, the technology offers opportunities for streamlined processes, reduced transaction costs, and enhanced transparency.

Global FinTech Blockchain Market - By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

North America, particularly the United States, has been a dominant force in the FinTech Blockchain market. The region has witnessed extensive adoption, driven by a mature financial ecosystem, robust technology infrastructure, and a conducive regulatory environment. The presence of numerous FinTech hubs and a high level of innovation also contribute to its dominance.

Europe is a second significant player in the market share, with countries like the United Kingdom, Germany, and Switzerland being notable hubs. The European Union has been proactive in exploring blockchain's potential, and several financial institutions and startups in the region have embraced blockchain for various applications.

The Asia-Pacific region is also experiencing a surge in FinTech Blockchain adoption. Countries like China, Singapore, and India are actively exploring and implementing blockchain solutions. The region's large unbanked population and the push for digital transformation contribute to the growing influence of FinTech Blockchain in Asia-Pacific.

 Latin America has shown a growing interest in FinTech Blockchain solutions. Countries like Brazil and Mexico are exploring the technology for financial inclusion, cross-border payments, and supply chain finance.

The Middle East and Africa are in the early stages of FinTech Blockchain adoption particularly the Gulf Cooperation Council (GCC), which has shown interest in blockchain for applications like remittances and trade finance.

KEY MARKET PLAYERS:

The global FinTech blockchain market includes providers such as AWS (USA), IBM (USA), Microsoft (USA), Ripple (USA), Chain (USA), Earthport (United Kingdom), Bitfury (United States), BTL Group (Canada), Oracle (United States), Digital Asset Holdings (United States), Circle (Ireland), Factom (United States), AlphaPoint (United States), Coinbase (USA), Abra (USA), Auxesis Group (India), BitPay (USA), BlockCypher (USA), Applied Blockchain (UK), RecordesKeeper (Spain), Symbiont (United States), Guardtime (Estonia), Cambridge Blockchain (United States), Tradle (United States) and Blockchain Advisory Mauritius Foundation (Mauritius).

RECENT HAPPENINGS IN THIS MARKET:

• In June 2020, Bitfury Group and Nippon Angel Investment Company (NAIC) jointly introduced their digital currency infrastructure fund in Japan, which is the first of its kind. The fund will allow individual and institutional investors to diversify their portfolios into a digital currency infrastructure.
• In March 2020, AlphaPoint, a New York-based company, raised $ 5.6 million in additional funding round, bringing its total capital raised to date to $ 23.9 million. The latest investment will be invested in the development of new trading features, including improved margin and liquidity trading solutions and advanced brokerage capabilities. The company raised $ 15 million in its first major funding round in June 2018, with help from cryptocurrency bank Galaxy Digital.