The North American fintech market is expected to be worth USD 212.3 billion by 2029 from USD 71 billion in 2024 and grow at a CAGR of 24.5% from 2024 to 2029.
Banks and companies are investing heavily in technology solutions to increase security for financial transactions. FinTech, a combination of the words "finance" and "technology," is a relatively new term that applies to emerging technologies that help consumers or financial institutions provide services in new and faster ways than traditional methods. If you think about the difference between entering a bank and requesting a balance and the ability to obtain that information in real-time from your phone, you are probably familiar with the impact of FinTech. Artificial intelligence has entered the PIN technology market, and in 2019 we will see more digital and voice support for banking.
As the use of mobile devices and technology-based solutions grows, the demand for financial and banking solutions that can be accessed through personal devices increases. The new innovations in banking are expected to radically change the way consumers buy, pay, deposit and buy insurance. A new wave of Fintech technology is changing customer behavior and interactions today. Each modern bank has a unique mobile application that allows its customers to trade online and transfer money to other users around the world. This is creating an essential financial technology market where suppliers can take advantage of the demands of multiple banks. Cybersecurity is experiencing significant challenges in information technology. Organizations vulnerable to financial losses due to cyber-attacks are investing heavily in FinTech, which provides not only financial data security but also offers convenient transactions, ensuring smooth operation of the financial system and perfect cash flow.
North American Fintech Market Drivers:
Technological advancements is majorly propelling the growth of the fintech market in North America. Rapid advancements in technology such as artificial intelligence, machine learning, blockchain and cloud computing have enabled fintech companies to develop innovative solutions that enhance efficiency, accessibility and security in financial services. Cutting-edge technologies such as AI and blockchain power fintech innovations, such as algorithmic trading platforms and decentralized finance (DeFi) protocols and transforming the financial landscape in North America. For instance, companies such as Robinhood and Coinbase have been leveraging advanced algorithms to offer seamless trading experiences and blockchain-based platforms such as Ethereum have been using advanced technologies to enable decentralized lending and borrowing. Realizing the potential that advanced technologies offer, several financial companies in the North American companies have been increasingly investing to offer enhanced customer experiences and streamline operations. For instance, one of the reports of Deloitte says an estimated 79% of North American financial institutions are planning to increase their investment in AI technologies over the next three years to provide enhanced customer experiences and streamline operations.
The rapid shift in consumer behavior towards digital banking and payment solutions across the North American region is boosting the growth rate of the North American fintech market growth due to the widespread adoption of mobile banking apps such as Chime and digital payment platforms such as PayPal. The COVID-19 pandemic fueled this trend. During the COVID-19 pandemic, more consumers have embraced contactless payments and online banking services for their convenience and safety. In North America, mobile banking adoption has seen significant growth. As per a survey by J.D. Power, an estimated 61% of retail bank customers in North America used mobile banking in 2021, which was 48% in 2020.
Regulatory initiatives have been promoting the innovation and competition in the financial services industry and is favoring the growth of fintech market in North America. For instance, 75% of North American banks consider regulatory compliance as a top-three priority. The growing investments and funding for fintech startups in North America is contributing to the North American market growth. Fintech startups in North America have been attracting substantial investments from venture capital firms and institutional investors. For instance, companies such as Stripe and Square have raised billions of dollars in funding to develop payment processing solutions and financial infrastructure that cater to the evolving needs of businesses and consumers alike. As per the data of PitchBook, fintech startups in North America raised over $60 billion in venture capital funding in 2021.
North American Fintech Market Restraints:
Concerns about consumer data security are limiting the growth of the financial technology market (FinTech). Fintech companies collect a large amount of data about their customers, including personal information and other financial records. Many Fintech companies track their users by collecting data on their customers' online spending behaviors and social media patterns. Some of the primary security problems for companies operating in the Fintech market include data loss, data leakage, malware injection, account hacking and cloud service abuse. In these cases, distrust of the client arises in the safe handling of personal information, which limits the growth of the North American Fintech market.
This research report on the North American fintech market has been segmented and sub-segmented based on the following categories.
North America Fintech Market - By Technology:
Based on technology, AI and blockchain segments accounted for majority of the North American market share in 2023. The blockchain segment held 36.1% of the North American market share in 2023 and is estimated to register a healthy CAGR during the forecast period. Blockchain technology revolutionizing financial transactions by offering transparency, security and efficiency. The growing demand for decentralized finance (DeFi), regulatory clarity and rapid adoption of blockchain technology by various enterprises are driving the growth of the blockchain segment in the global market.
On the other hand, the AI segment is predicted to register a promising CAGR during the forecast period.
North America Fintech Market - By Service:
The payments segment in the North American market is multiplying with the increasing consumer transactions and payments for products and services over the Internet, as well as mobile payments from point-of-sale terminals through smartphone applications. The division is predicted to experience a record growth rate over the forecast period.
North America Fintech Market - By Application:
Based on the application, the banking segment holds a prominent share of the regional market and is likely to continue its dominion in the coming years. The increasing need for secured digital transactions and the advent of several Fintech start-up companies have boosted the adoption of these services in the banking industry.
North America Fintech Market - By Deployment Mode:
North America Fintech Market - By Country:
North America is considered the most competitive and rapidly developing technology market in the financial market, attributed to the contribution from nations like the United States of America and Canada. The USA Fintech market has registered the maximum adoption of solutions due to its initial implementation in most applications and the presence of leading players in the area.
The U.S. fintech market is expected to experience robust growth during the forecast period. Factors such as technological innovation, changing consumer preferences and supportive regulatory initiatives are anticipated to propel the fintech market growth in the U.S. The COVID-19 pandemic has accelerated the adoption of digital financial services in the U.S. and consumers embraced online banking, contactless payments and robo-advisors at an increased pace. Investments in the U.S. fintech startups have been increasingly significantly and providing several opportunities to the market participants. Regulatory developments including initiatives promoting open banking and financial inclusion have been shaping the regulatory landscape and fostering innovation.
KEY MARKET PARTICIPANTS:
Companies playing a leading role in the North American fintech market include Oscar, Square, ZhongAn, Qufeng, Lufax, Avant, Atom Bank, Kabbage, Kreditech, JD Finance, Nubank, SoFi, Klarna and Funding Circle. The leader in the financial technology market was Ant Financial of the Alibaba Group, which observed ten times more Wallet subscriptions and 13 times more average (daily) transactions in 2017 than in 2015.
RECENT HAPPENINGS IN THE MARKET:
Frequently Asked Questions
The United States and Canada are the primary contributors to the fintech market in North America, with a substantial share of fintech activities concentrated in major financial hubs.
The regulatory environment in the United States plays a crucial role in shaping the fintech sector. Regulatory frameworks, such as those governing digital payments and online lending, influence market dynamics and innovation.
In Canada, key trends driving fintech growth include the adoption of digital wallets, blockchain technology applications, and the integration of artificial intelligence in financial services.
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