Automotive Fintech Market: In Vehicle Payments, Online Leasing, Digital Loans & Purchases, Online Insurance 2021-2031

OREGAON, PORTLAND, US is projected to reach $112.1 billion by 2031, growing at a CAGR of 9.2% from 2022 to 2031.

North America currently dominated the global automotive fintech market in 2021. There is rapid growth in fintech technologies that has coincided with a Fintech applications and websites that have made obtaining car loans and insurance an easy process. Also, it is predicted, there may be an increase in the demand for car loans in the US during the forecast period as a result of variables including the growth in transport-related industrialization activities and the increase in the number of consumers requesting car loans. Many car dealers, brokers or even showrooms may present a car loan scheme to customers who visit their locations. These initiatives are intended to help individuals pay a percentage of the value of the car upfront instead of paying monthly payments, which is estimated to promote consumer confidence. Fintech in the automotive industry has been carried out across the region as a result of an increase in the number of cars and changing consumer behavior, leading to the expansion of the automotive fintech market in this region.

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An increase in developments in the automotive fintech sector across the region is projected to drive market expansion. In the insurance industry, for example, digitizing insurance and claims processing can help insurers eliminate false claims, shorten processing times by 80% and reduce settlement costs by 90%. Automakers can reduce the technology gap and thereby improve the customer experience with the help of multiple customer touch points provided by fintech collaboration. Furthermore, the automotive fintech market is expected to represent the future of the automotive industry, supporting market players in increasing revenue margins and retaining customers.

Security and privacy are major concerns in the market. Cars are vulnerable to hacking and theft due to connected technologies such as telematics, GPS and remote start systems. Fintech companies in the automotive industry must implement encryption and firewalls to combat this. Moreover, data security is also an issue as significant amounts of personal and sensitive information are collected and stored. Businesses must use encryption, secure storage and access controls, and regular data audits to prevent data breaches. When it comes to payment security, digital payments are vulnerable to fraud and theft. Businesses must implement secure payment systems that include multi-factor authentication, encryption and fraud detection to mitigate these concerns. Addressing these security and privacy issues will increase the cost of fintech services limiting the expansion of the automotive fintech market.

However, the adoption of blockchain technology presents a significant opportunity for innovation in the automotive fintech industry. It can be used to securely and transparently store and manage loan information, reduce the risk of fraud and error, and increase the efficiency of the loan application and approval process overall. Furthermore, blockchain technology has the potential to improve the transparency and security of loan transactions, allowing customers to better understand and manage loan terms and conditions. This can help build consumer trust and credibility, as well as increase customer satisfaction. In addition, the decentralized nature of blockchain technology can give customers more control over their personal loan information, further strengthening the security and privacy of their financial data. Fintech companies in the automotive industry can use blockchain technology to accelerate growth, increase competitiveness and ultimately benefit consumers.

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COVID-19 impact assessment

The COVID-19 epidemic has had a significant impact on the automotive fintech industry. The market, which was already expanding steadily due to growth in the use of technology in the automotive industry, faced difficulties when the pandemic halted the industry. This was due to the closure of production facilities and showrooms, as well as a decrease in consumption expenditure. However, the epidemic has accelerated the transition to digital payments and contactless transactions, which has helped fintech startups in the automotive industry. Furthermore, the epidemic highlighted the need for financial stability and flexible payment options, resulting in an increase in demand for inventive financing solutions provided by automotive fintech firms.

KEY FINDINGS OF THE STUDY

On the basis of end use, in-vehicle payments are expected to show significant growth in the near future.

On the basis of channel, the subscription segment is expected to show significant growth in the near future.

On the basis of vehicle type, the commercial vehicle segment is expected to show significant growth in the near future.

On the basis of region, Asia Pacific is expected to register the highest CAGR during the forecast period.

Key players operating in the automotive fintech market include The Savings Group, Inc., AutoFi Inc., Blinker, Inc., By Miles Ltd., Creditas Soluções Financeiras, Cuvva, Grab, ROUTEONE, Euroclear, Kuwy Technology Service Private Limited.

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