The global market size is predicted to be worth USD 644.6 Billion by 2029 from USD 209.7 billion in 2024, growing at a CAGR of 25.18% from 2024 to 2029.
Fintech is the short form of financial technology. In the last couple of years, the concept of fintech gained immense popularity and has transformed the way businesses operate. Fintech is on its way to emerging further and offering businesses opportunities to change their approach to customer-centric. Across the world, several companies that range from start-ups to established companies have been trying to take an active position in the space of fintech. Considering the growing adoption of fintech, companies that offer financial services and technology services have been working together to develop innovative and disruptive technologies to align with the constantly changing business scenario. Fintech is likely to replace several traditional services in various sectors such as payments, electronic commerce, banking, social commerce, wealth management and others.
The e-commerce industry is growing rapidly and has emerged as the major application of Fintech.
With the growing number of people using smartphones to make online transactions and increasing awareness among businesses and consumers regarding the abilities of Fintech to improve the customer experience by providing convenience in payments and delivery in e-commerce, the global fintech market is likely to set new standards in the coming years,
In the last few years, the usage of smartphones and mobile apps has increased tremendously and brought significant changes in the way financial services are being accessed. On the other hand, the demand for digital payments has been skyrocketing, which is fuel adding fuel to the demand for fintech services.
The growth in the number of smartphone users and the launch of the fintech mobile apps are likely to increase further in the coming years, and the same kind of growth can be noticed in the market.
The adoption of fintech services among clients has grown at a rapid rate in the last few years. Fintech helps SMEs meet their financial needs, such as banking and payments, financial management, financing, and insurance.
With a global adoption rate of 25%, this market presents many growth opportunities for fintech companies. In addition to credit financing, there are several ways that SMEs can benefit, such as using APIs and distributed accounting technologies to achieve process efficiency, these are some examples where SMEs can benefit from the ecosystem of Fintech.
FinTech strengthens the security of financial data. Cybersecurity is becoming a worrying challenge in information technology. Organizations are vulnerable to financial loss due to cyber-attacks, so they invest heavily in FinTech. FinTech not only ensures the security of financial data but also instils convenient transactions, leading to smooth operations and perfect cash flow in the financial system.
Considering the ease of use and convenience, more and more people worldwide have been shifting to use online banking services instead of traditional banking services. In the contemporary world, each bank has its own mobile application that allows customers to transact online and transfer money to other users around the world, which creates a significant FinTech market for providers to capitalize on demand from various banks.
Unfortunately, the market growth is overshadowed by government regulations with strict rules that limit the operability of FinTech applications. Also, there is a notable lack of human contact in these apps, which is sometimes combined with the additional convenience fees applicable to transactions, and this is quite evident from the fact that many accounts created in FinTech mobile apps are idle. However, the future foresees less stringent government rules, advanced data security and a greater preference for FinTech applications by people, which will drive the growth of demand for them.
The fintech sector has yet to gain favorable regulations in many countries. In the recent past, the regulatory crackdown of China on peer-to-peer lending platforms resulted in the closure of several P2P lending platforms and impacted the fintech sector badly. A similar situation is also encountered in India as well. In India, the Reserve Bank of India imposed restrictions such as data access restrictions, data storage, security breaches, key facts statement (KFS), digital signatures and customer consent on digital lending platforms, which is creating barriers to the fintech companies operating in India. Likewise, these regulatory hurdles have been hampering innovation and investments in the fintech space worldwide and limiting the growth rate of the global market. In addition to the above, factors such as security concerns, cybersecurity risks, data privacy concerns and shortage of skilled personnel and slow adoption of fintech solutions in some of the emerging markets are showcasing unfavorable impacts on the market.
REPORT METRIC |
DETAILS |
Market Size Available |
2023 to 2029 |
Base Year |
2023 |
Forecast Period |
2024 to 2029 |
CAGR |
25.18% |
Segments Covered |
Technology, Service, Application, Deployment |
Various Analyses Covered |
Global, Regional, & Country Level Analysis; Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
Market Leaders Profiled |
ZhongAn, Oscar, Qufeng, Avant, Lufax, Atom Bank, Kreditech, Kabbage, JD Finance, SoFi, Nubank, Klarna, Square and Funding Circle and other market players |
Fastest Growing Region |
Asia Pacific |
Largest Market |
North America |
APIs have become foundational in modernizing financial services by facilitating open banking, enabling faster innovation and improving customer experience. The growing usage of API to enable seamless integration and data exchange between financial institutions, third-party developers, and service providers is one of the key factors propelling the expansion of the API segment in the global market.
The AI segment was the second biggest segment in the global market in 2023 and is expected to grow at a CAGR of 16.1% during the forecast period. The growth of the AI segment is majorly attributed to the capability of AI to analyze vast datasets, derive actionable insights, and automate complex decision-making processes. The transformative potential of AI in data analysis, risk management, fraud detection, and customer service automation and the quest for operational efficiency, enhanced decision-making, and superior customer engagement are boosting the growth rate of the AI segment in the global market. AI interfaces and chatbots have revolutionized customer service in recent years, and its augmenting business will allow the AI-oriented market to develop at a notable CAGR in the next five years.
The blockchain segment is another major segment and is eyeing to capture a notable share of the global market during the forecast period. Blockchain plays a crucial role in areas such as digital currencies and smart contracts to offer secure and transparent transactions. The ability of blockchain to provide decentralized and tamper-resistant ledgers that ensure trust in financial transactions is driving the growth of the blockchain segment in the global market.
The rapid adoption of digital payment methods and the growing volume of digital payment transactions are propelling the expansion of the payment segment in the global market. Factors such as e-commerce expansion and the rise of contactless payments are further boosting the growth rate of the payment segment.
The fund transfer segment is the next promising segment and is projected to grow at a CAGR of 12.8% during the forecast period. The growth of the fund transfer segment is majorly driven by the growing number of international money transfers and remittances. The global nature of financial transactions fuels the dominance of fund transfer services, and fintech solutions in this space often offer faster, more cost-effective, and transparent alternatives to traditional banking methods.
The personal finance segment is set to hit the highest CAGR during the forecast period owing to the gaining prominence as consumers seek tools to manage their finances effectively. The dominance of the personal finance segment is driven by the growing demand for financial literacy, real-time insights into spending habits, and the desire for personalized financial advice.
Fintech innovations in banking, such as mobile banking apps, digital wallets and peer-to-peer lending platforms have been reshaping how the traditional banking system works. Factors such as convenience, accessibility and cost-effectiveness are majorly propelling the demand for fintech banking solutions among consumers and financial institutions and driving the segmental expansion.
The insurance segment held a substantial share of the global market in 2023. The growth of the insurance market is primarily driven by innovations such as digital underwriting, personalized policies, and streamlined claims processing. Insurance leverages technology to enhance customer experiences, provide transparent offerings, and optimize risk management.
The securities segment is another lucrative segment and is likely to perform well during the forecast period. Securities applications play a third significant role in modernizing investment processes. The dominance of securities applications is attributed to their ability to democratize access to investment opportunities, automate portfolio management, and provide cost-effective solutions for investors seeking diversified and personalized investment strategies.
The domination of the cloud segment is likely to continue during the forecast period owing to the scalability, flexibility, and cost-effectiveness of cloud solutions that seek to scale their operations rapidly. The ability to adapt to fluctuating workloads and the potential for cost savings contribute to the dominance of cloud deployment.
The on-premises segment did well in 2023. On-premises deployment, where the software and infrastructure are hosted locally within a company's data centers, has traditionally been the choice for some financial institutions due to security and control considerations. On-premises solutions offer a high level of customization and control but may face challenges in terms of scalability, upfront costs, and agility compared to cloud alternatives.
The supremacy of North America worldwide can be seen continuing during the forecast period, with a tough fight coming from the Asia-Pacific region. The domination of the North American region is majorly credited to the increased adoption and development of prominent technologies in the fintech sector of North America. The growth of North America in the worldwide market is primarily attributed to the increasing support from the public and private sectors. Trends towards blockchain technology in developed countries like the U.S. and Canada are inclined to show a positive impact on the growth rate of the North American market. Blockchain technology is greatly adopted by banking, finance, and healthcare and is raising interest in fintech services.
Opportunities abound in the changing landscape of fintech in the Asia-Pacific region, and investment is rushing to exploit them. Open banking and other regulatory policies are modifying financial services business, with external service providers ready to access customer information from formerly owned banks. China and India are experiencing much higher penetration rates for fintech services in this vicinity. The growth of the Asia-Pacific regional market is majorly driven by factors such as rapid digitization, burgeoning tech startups, supportive regulatory frameworks, high smartphone penetration, rising internet connectivity, an increasing number of initiatives from the governments of Asia-Pacific countries to promote financial inclusion and strong investor interest in fintech startups. India is one of the topmost countries in terms of using a high number of digital companies.
China is next in leading the dominant share of the market and is likely to grow at a CAGR of 8.34% during the forecast period. The increasing youth population is the primary factor that will help the market grow in this country. Rapid urbanization and a growing number of smartphones promote the demand for fintech services, especially in the banking sector. Fintech services will enhance the customer experience as they offer M2M communication that increases the efficiency in decision-making. Quick adoption of advanced technologies to ease the complex structured business processes in digitization is surging the growth rate of the Chinese market. Japan and South Korea are likely to show great opportunities for the market in the coming years, whereas the Singapore market has been growing faster in the past few years.
The increasing number of banking institutions and the launch of various digital payment methods in favor of customers are attributed to the growth rate of the European market. The European market has been experiencing significant investments from various venture capital, private equity, and corporate funding firms in the last few years, which has been contributing to the European market growth notably. The governments of European countries have been strongly supporting fintech innovation and have brought initiatives such as PSD2 and GDPR to promote open banking and data protection. The regional market players such as Revolut, TransferWise and N26 have shown significant growth and brought several changes to the banking and payment systems.
Latin America is continuing to witness robust growth opportunities in the foreseen period. The growing popularity of mobile-based payment methods promotes the growth of the Latin American market. The number of fintech companies in Latin America is growing steadily in the Latin American region, and countries such as Brazil and Mexico have been experiencing a steady increase in the usage of mobile payments. The governments of Latin American countries are also bringing favorable regulations to support innovation and entrepreneurship in the fintech sector across the region. For instance, in 2018, Mexico announced a fintech law to regulate crowdfunding, electronic payments and cryptocurrencies.
The market in the Middle East and Africa is gaining traction and is poised to expand further during the forecast period. Factors such as the growing penetration of mobiles and improvements in the banking infrastructure are promoting the growth of the MEA market.
Companies that play a notable role in the global fintech market include
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Frequently Asked Questions
The global market is estimated to grow at a CAGR of 25.18% from 2024 to 2029.
The global market is expected to reach USD 209.7 billion in 2024.
North America is the most dominating region in the global market.
Companies playing a major role in the global market are Stripe, Square, PayPal, Robinhood, Coinbase, Ant Group, Adyen, Revolut, TransferWise, SoFi, Affirm, Klarna, Chime, Plaid, Ripple, Wealthfront, Betterment and OnDec.
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