Fintech’s market value will reach $1.5 billion by 2030
The UK and the EU currently have the third largest financial institution market combined. The BCG report claims that the fintech sector is expected to grow fivefold between 2021 and 2030, with the payments sector leading the way.
In addition, the Asia-Pacific region will become the leading fintech market in the world by 2030 – overtaking the US – with a projected annual growth rate of 27%. Growth will be mainly driven by emerging economies such as China, India and Indonesia, which have large fintech companies, many small and medium-sized enterprises, and a growing tech-savvy youth and middle class.
North America is currently the world’s largest financial services industry. The report predicts that it will remain a major fintech market and center of innovation, with the fintech sector expected to grow fourfold to $520 billion by 2030.
The fintech sector currently accounts for 2% of the $12.5 billion in global financial services. According to BCG and QED Investors, this figure will reach 7% by the beginning of the next decade.
Laimonas Noreika, co-founder and CEO of HeavyFinance, commented on the findings.
“These projections show exponential growth in the coming years, and yet so many key sectors have yet to take advantage of the power of fintech,” said Noreika. “As our industry moves forward, we need a much broader conversation about the importance of protecting the environment, offering companies the opportunity to access sustainable climate investment and running cleaner, greener businesses by reducing CO2 emissions.”
Emerging technologies and the fintech sector
Currently, the fintech sector is undergoing significant changes, mainly enabled by disruptive technologies.
According to GlobalData’s “Bi-Monthly Disruptor Roundup: Fintech February and March 2023” report, artificial intelligence, blockchain disruption, as well as strategic acquisitions are driving digital transformation across financial services as a whole.
A recent example is the recent collaboration between Stripe and OpenAI, announced in March. Under the tie-up, Stripe will incorporate OpenAI’s new natural language technology GPT-4 into its digital payment processing and other offerings.
Steve Hadaway, chief revenue officer of Encompass Corporation, also commented on BCG and QED Investors’ report.
“The FinTech sector has enormous 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, on a way that is efficient, effective 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, Hadaway said.
“A growing number of banks are embarking on digital transformation journeys, underscoring the need for solutions that are key to improving efficiency and customer experience to drive business growth. By using dynamic KYC process automation, for example, organizations realize they can unlock the value of their KYC data to win more business and reduce time to revenue. This is just one area of the industry that is perfectly positioned to flourish as technology, regulation and business strategy continue to closely align.”
