FinTech revenues are set to grow sixfold from $245bn to $1.5trn by 2030, according to a report from Boston Consulting Group (BCG) and QED Investors. The report suggests that the FinTech sector, which currently holds a 2% share of the $12.5trn in global financial services revenue, is estimated to grow up to 7%.
The study revealed that 2022 proved 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 European Union combined represent the world’s third-largest financial institution market and are expected to see substantial FinTech growth through 2030, estimated at more than fivefold over 2021 and led by the payments sector.
The report also reveals that Asia-Pacific is set to outpace the US and become the world’s top FinTech market by 2030, with a projected compound annual growth rate (CAGR) of 27%. This growth will be driven primarily by emerging economies such as China, India, and Indonesia, which have the largest FinTechs, voluminous underbanked populations, a high number of small and medium-sized enterprises, and a rising 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 $520bn in 2030, with the US accounting for a projected 32% of global FinTech revenue growth.
The report highlights that the payments sector will also grow fivefold to $520bn, driven by cross-border payments, “payment-plus” models (bill pay and payment apps offering adjacent services such as wallet services), and the proliferation of use cases driven by real-time payments.
Commenting on the findings, Laimonas Noreika, co-founder and CEO of FinTech company HeavyFinance, said, “The FinTech industry is playing a crucial role in driving global economic growth, creating jobs and powering businesses. These projections show exponential growth in the coming years, and yet so many key sectors have yet to fully benefit from the power of FinTech.”
Encompass Corporation CRO Steve Hadaway added, “The FinTech sector has huge potential for rapid growth, which is being reflected in the banking sector in particular. Today, every bank I speak to is wrestling with the same problem: How to meet increasing Know Your Customer (KYC) demands, regulatory and operational, in a way that is effective, efficient and helps to transform the organisation 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 revolutionise.
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