Banking Sector Revolution: 3 Fintech Stocks to Watch

Fintech is revolutionizing the banking sector. Indeed, artificial intelligence (AI), and blockchain can lead to a far more efficient and accessible system. As fuel for the boom, we are already seeing a good deal of global cashless payments. According to PwC, global cashless payment volumes are expected to jump to more than 80% by 2025.

Additionally, according to the Pew Research Center, about 40% of Americans have gone cashless, up from 24% in 2015. The number of Americans who still rely on cash is steadily declining, from 18% in 2018 to 14% last year. That will benefit the fintech market, which could be worth nearly $699 billion by 2030. That said, it could be a good time to start accumulating fintech stocks and even ETFs.

FinTech ETF (FINX)

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When it comes to fast growing sectors, like fintech, I always like to diversify and get maximum exposure to the industry. With a cost share of 0.7%, is Fintech ETFs (NASDAQ:FINX) invests in companies at the forefront of the emerging fintech sector. This includes industries that are currently changing, such as insurance, investment, fundraising and mobile and digital solutions.

PayPal (NASDAQ:PYPL), Fiserv (NASDAQ:FISV), Block (SNEEZE:SQ), Global payments (SNEEZE:GPN), and Coin base (NASDAQ:COIN) are some of the top holdings. In addition, we must consider that according to Global X, in 2020, the number of online banking consumers was close to 1.9 billion, and by 2024 it could be up to 2.5 billion – all thanks to the digital transformation of society.

ARK Fintech Innovation ETF (ARKF)

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It is also ARK Fintech ETF (NYSEARCA:ARKF). With an expense ratio of 0.75%, the ETF invests in fintech stocks that see a significant portion of their revenue or market capitalization from the theme of Fintech innovation.

It has also stated its primary business to be in products and services focused on the theme of Fintech innovation, according to ARK-Funds.com. Some of the top holdings include Shopify (SNEEZE:SHOP), Coinbase Global (NASDAQ:COIN), Block (SNEEZE:SQ)and MercadoLibre (NASDAQ:MELI), for example.

SoFi (SOFI)

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Or take a look at SoFi (NASDAQ:SOPHIE), which has enjoyed strong double-digit revenue growth in recent quarters, along with reduced losses. This company’s focus is to make it easier for its 5.2 million users to manage their money in one app. As far as simplicity goes, there’s a lot to like about SoFi’s business model.

The company’s strong growth has resulted in better finances. Notably, SOFI’s fourth-quarter loss narrowed to $40 million, or 5 cents per share. Analysts were only looking for a loss of nine cents. Adjusted EBITDA came in at $70 million, ahead of adjusted EBITDA of $5 million year over year.

As Mizuho analysts noted, “The big hit on revenue and adjusted EBITDA are big positives for Q4 results. The promise to deliver positive GAAP net income in Q4 2023 should be well received, as GAAP losses were a key deterrent in 2022 for FinTech investors.”

At the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.