Is fintech the next big thing?
Our research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2022 and 2028.
In line with global trends, the FinTech ecosystem has witnessed tremendous technological advancements and is projected to grow sixfold from $245 billion to $1.5 trillion by 2030. The Asia-Pacific region is expected to outpace the US and climb up the ranks to become the world's leading FinTech market by 2030.
Over the past decade, the global financial technology (fintech) industry has experienced a surge in growth. Digital banking and financial services are proving transformative, both in developed economies and also in regions where billions of people have previously struggled to access banking services.
FinTech (Financial Technology) has transformed the financial industry by leveraging technology to provide innovative financial services. While FinTech has disrupted traditional banking in many ways, it's unlikely to completely replace banks entirely.
Global investment in fintech nosedived in 2023, plunging to a five-year low of $113.7bn from 4547 deals. This marked a 42 per cent decline from the $196.3bn reported in 2022 and represented the weakest result since 2017, according to KPMG's recent Pulse of Fintech report.
Online banks and fintech payment firms have shaken up a stagnant finance sector and benefited users. The UK is ranked by most surveys as the second-biggest market in the world for fintech funding, putting it in prime position to grab a big share of the global market.
Projections show that SaaS in fintech will grow exponentially by 623 billion this year, with an impressive annual growth rate of 18% expected for 2024. For instance, lending digital platforms have fully embraced the benefits of SaaS.
Amid deteriorating credit trends and regulatory tightening, digital lending fell 40% to $7 billion. The decline would have been worse if not for the growing support for consumer and SME credit providers in emerging markets and revenue-based financing startups in general.
Some Fintech Sectors Are Still Attractive. Since most capital is heading towards AI-related tools, fintech is still “not a hot sector right now” and a rebound could occur slowly, Matt Wilson, co-founder and managing partner of BDev Ventures which has $150 million of assets under management.
The average fintech salary in the USA is $135,000 per year or $64.90 per hour. Entry level positions start at $98,701 per year while most experienced workers make up to $190,000 per year.
Why FinTech is the future?
By boosting production and efficiency, FinTech enhances the quality of conventional financial institutions. There are greater chances when FinTech companies are viewed as allies rather than competitors by banks and credit unions.
- Data Security.
- Changing Regulations.
- Competition from Traditional Banking Firms.
- Excelling at Customer Experience.
- Demand for Personalization.
As fintech companies capture market share from traditional banks and other firms operating in financial services, they pose a potential threat to the stability of the financial sector by eroding profits and raising operating costs.
While many bankers view FinTech as a significant threat, FinTech also has the potential to assist the community banking sector. FinTech offers the potential to improve the health of community banks by enhancing performance and improving profitability and ROEs back to historical levels.
However, fintech has its disadvantages. In this article, we have explored some of the most significant disadvantages of fintech, including security risks, lack of physical branches, global imbalance, compromise of privacy, legal and regulatory challenges, and scalability challenges.
A possible problem with integrating third-party applications into fintech solutions is the security risk. Insufficient security in third-party integrations can harm the fintech industry because it compromises app security and digital security of banking and financial assets.
It is definitely a great field as there are countless opportunities in the corporate world related to fintech. Worth it or not is up to the person to decide and by picking up a project or working hands on or getting advice from someone you know has a background in it will be a good start.
Fintech offers an exhilarating opportunity to be at the forefront of innovation, shaping the future of finance. Working in fintech allows you to explore novel ideas, challenge the status quo, and create transformative solutions that disrupt traditional financial systems.
The fintech industry is a realm of endless possibilities, where finance and technology converge to redefine how we manage money. From promoting financial inclusion and democratizing finance to fostering innovation and collaboration, fintech provides ample reasons to fall in love with the industry.
In 2050, the payments ecosystem (acquirers, PSPs, facilitators, and aggregators) will revolve around creating integrated capabilities within an ecosystem of partners to truly optimize the customer experience and deliver a seamless, personalized payments journey from awareness to purchase and long-term retention.”
How fast is the fintech market growing?
| Report Coverage | Details |
|---|---|
| 2030 Value Projection | USD 882.30 Billion |
| Base Year | 2022 |
| FinTech Market Size in 2022 | USD 257.26 Billion |
| Historical Data for | 2017 to 2021 |
AI in Fintech is also transforming the loan and credit assessment process by efficiently evaluating creditworthiness based on financial data, enabling faster and more accurate lending decisions. Streamlining Transactions: AI-powered robotic process automation has revolutionized transaction processing.
Fintech companies face unique risks in four primary areas: regulation, cybersecurity, financial and business, and reputation.
After a couple of brutal years, the fintech sector is beginning to see some signs of light. There will be yet more winnowing in 2024, but already the brands that are here to stay are coming into focus.
Learning FinTech involves mastering industry-specific tools such as Python, as well as constantly staying ahead of technological innovation in the field. Professionals in FinTech need to combine both hard skills, such as data visualization and programming, with soft skills like communication and business acumen.
