Overview of Fintech Industry-All You Need to Know

Introduction of Fintech Industry

Fintech is defined as any company that uses technology to develop financial services and processes and to automate them. The concept is a large and rapidly growing market servicing both customers and enterprises.

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    Artificial intelligence, blockchain, cryptography, biometrics and identity management, data security, and automation of robotic processes are the main technology involved in the fintech sector. Demand for fintech has increased, due to rise in the younger population.

    For instance, in Feb 2020, according to a Bank of International Settlements report, FinTech use is higher in countries with a younger population, such as India, South Africa, and Colombia.

    An earlier survey showed that 91% of Indian respondents, 86% of Chinese respondents, and 60% of US respondents considered financial products from technology companies that they already use and that this desire among younger customers is even higher (ages 18-34).

    These emerging factors are driving conventional financial institutions to invest in technology and to pay attention to their customers’ evolving trends. The changes seen currently in the industry will affect both emerging and incumbent players. Yet it may be a struggle to grasp space and concentrate on important advances in the face of all the hype.

    Key Trends in Fintech Sector

    FinTech

    A pattern followed by the new generation is the rise of mobile payment technologies. A mobile wallet is a type of digital wallet that allows the user to process purchases via a smartphone application, view account details, and pay for services.

    The mobile wallet stores information about the payment card on the app itself, to speed up the whole payment process. Mobile wallets are on the increase, and the growing number of smartphones can be contributed to the cause for the large adoption of mobile wallets.

    According to a report by NewZoo, At the end of 2019, there were almost 3.2 billion users of smartphones. With more smartphone users, there are also more users of mobile wallets. In 2019, the demand for mobile payments is around $ 114 billion and is forecast to hit  USD 190 billion by 2021.

    In the insurance market, which is anticipated to receive USD 15,343.3 million in global annual revenue by 2023, the largest growth opportunity in the FinTech market by form of service will emerge.

    In the payment processors industry, which is expected to earn $22,163.8 million in global annual revenue by 2023, the top growth opportunities in the FinTech market by form of service provider will emerge.

    In the other industry, which is anticipated to reach $22,727.3 million in global annual revenue by 2023, the top growth opportunities in the FinTech market will emerge from technology. The business cap of FinTech is likely to gain the most in China at $19,664.4 million

    In a highly regulated finance market, the government is naturally the prima facie driver for the growth or failure of fintech. For example, along with regulators such as SEBI and RBI, the Government of India actively supports the Indian economy’s aspiration to become a cashless digital economy and to emerge through both funding and promotional initiatives as a powerful fintech ecosystem.

    The initiative Start-Up India initiated by the Government of India in January 2016 involves a start-up fund of USD 1.5 billion for Jan Dhan Yojana: more than 200 million05 unbanked people have been introduced to the banking sector.

    The Digital India and Smart Cities projects have been initiated to encourage the growth of the country’s digital infrastructure and draw foreign investment.¬†

    For instance, according to the National Association of Software and Service Companies., the Indian fintech software industry is expected to hit USD 2.4 billion from the existing USD 1.2 billion by 2020.

    Tech Players Operating in Fintech Industry

    The market is highly fragmented with the presence of local and regional players operating in the market.  Some of the major players are PayPal Holdings, Inc., Ant Financial Services Group., Tencent Holdings Ltd.., Square, Inc., and others. These players are focused on merger and acquisition, expansion, product launch, collaboration, and others to increase their market share.

    Some of the Recent News Pertaining to Fintech Industry

    Recommendation to Companies Operating in Fintech Industry

    We recommend Fintech manufacturing companies to concentrate on new block chain technology and mobile payments and transfer USP technology to take advantage of these possibilities.

    Payment processing has experienced tremendous progress over the past three years, offering transparency and low rates that other financial transfers lack. About 5 billion users are projected to be making purchases using their smartphones by 2019 thanks to the rapid development in eCommerce and m-Commerce.

    Any product that addresses the need for cheaper, quicker, and simpler payment processing has tremendous potential, whether it be a mobile payment system, a hardware interface that can process credit card payments, or an alternative money transfer service.

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