Fintech revenues to sixfold by 2030: BCG
Revenues or financial technology companies are expected to grow sixfold to $1.5 trillion by 2030, a report by Boston Consulting Group (BCG) and QED Investors showed.
Currently, the $12.5 trillion financial services industry is concentrated in North America and the Asia-Pacific region. By 2030, the Asia-Pacific region is expected to surpass the US to become the world’s largest financial technology market. The region is expected to rise at a compound annual growth rate of 27%, aided by fast-growing fintechs, which will facilitate financial inclusion.
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“Attractive demographics, native technology and technical capabilities and prudent regulations, combined with the sheer necessity to innovate to accelerate the upliftment of large swathes of humanity, make APAC the center of gravity for fintech,” says Yashraj Erande, Managing Director and Partner, BCG.
The report claims that more growth is expected to occur in developing countries in the Asia-Pacific region such as China, India and Indonesia, as they have the largest fintech technology, voluminous underbanked populations, a large number of SMEs and a growing tech-savvy youth and middle class.
“India is undergoing major fintech activity with the rise of local champions such as Paytm and Razorpay. There is a clear opportunity in the country for fintechs to provide access to financial services to India’s 190 million unbanked adults,” the report said. “We expect that major fintech revenue growth in India will be spurred by expanding GDP, the rise of an educated middle class, younger demographics coming of age and increasing fintech penetration.”
Lending, neo-banking and wealth technology platforms will drive the growth of fintech companies in India.
While Latin America will see accelerated penetration in fintech, North America will continue to be a key fintech and innovation hub, the report said.
The US will account for 32% of global fintech revenue growth through 2030, helped by a sharp increase in B2B2X (B2B to any end user) and B2b business and the expansion of monoline fintechs into more products and services.
The fintech market in Europe is also expected to grow strongly.
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The report comes at a time when various start-ups have struggled to raise funds from private equity investors.
In such a scenario, fintech must consider strengthening its competitiveness, follow aggressive strategies such as talent acquisition, gain market share by entering new geographies and explore opportunities for mergers and acquisitions, the report states.
