FinTech revenues are predicted to reach $1.5 billion by 2030
FinTech revenues are set to grow sixfold from $245 billion to $1.5 billion by 2030, according to a report by Boston Consulting Group (BCG) and QED Investors. The report suggests that the FinTech sector, which currently accounts for 2% of the $12.5 billion in global financial services revenue, is projected to grow up to 7%.
The study showed that 2022 was a challenging year for FinTech companies, which on average lost more than half of their market value. However, the report shows that this was a short-term correction in an otherwise long-term positive trajectory.
The UK and EU combined represent the world’s third largest financial institutions market and are expected to see significant FinTech growth through 2030, projected to more than quintuple by 2021 and led by the payments sector.
The report also reveals that Asia-Pacific is set to surpass the US to become the world’s top FinTech market by 2030, with a projected compound annual growth rate (CAGR) of 27%. This growth will primarily be driven by emerging economies such as China, India and Indonesia, which have the largest FinTechs, voluminous underbanked populations, a high number of SMEs and a growing tech-savvy youth and middle class.
North America, which currently has the world’s largest financial services industry, will remain a critical FinTech market and innovation hub, projected to grow fourfold to $520 billion by 2030, with the US accounting for an estimated 32% of global FinTech revenue growth.
The report highlights that the payments sector will also grow fivefold to $520 billion, driven by cross-border payments, “payment plus” models (bill payment and payment apps that offer adjacent services such as wallet services), and the proliferation of use cases driven by real-time payments.
Laimonas Noreika, co-founder and CEO of FinTech company HeavyFinance, commented on the findings, “The Fintech industry plays a critical role in driving global economic growth, creating jobs and driving businesses. These projections show exponential growth in the coming years, and yet so many key sectors are yet to benefit from the power of FinTech.”
Encompass Corporation CRO Steve Hadaway added, “The FinTech sector has great potential for rapid growth, which is reflected in the banking sector in particular. Today, every bank I speak to is struggling with the same problem: How to meet increasing Know Your Customer (KYC) requirements ), regulatory and operational, in a way that is effective, efficient and helps transform the organization in a way that has tangible long-term benefits. The answer is technology, which will be a key driver in the growth of the sector.”
The report concludes that the FinTech journey is still in its early stages and will continue to revolutionize.
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