Fintech Market

The fintech market is expected to grow at a CAGR of 25.18 per cent during the forecast period to be valued at USD 644.6 billion by 2029 from 209.7 billion in 2024.

Market Drivers

The fintech market growth is mainly driven by its expanding applications by financial institutions. This is because of the technological developments that the financial sector has experienced a considerable transformation and surge. Moreover, the market is expected to propel further with the emergence of technologies like generative AI and the remaining billions of underbanked and unbanked people globally.

Market Restraints

Data security is the primary restraint for the growth of the fintech market. The average cost worldwide for each data breach i.e. 3205 incidences was over 4.4 million in 2023 and 4.8 million in 2024. This resulted in a much larger concern about cybersecurity in banking. Besides this, regulatory compliance is another key challenge for market growth as it is heavily regulated by the government.

Segment Analysis

By Technology

• API
• Artificial Intelligence
• Blockchain
• Distributed Computing

API is the biggest segment of the fintech market. Enhanced functionality and improved user experience are the factors fuelling the segment’s market growth. API usage provides varied product portfolios and strengthens the fintech ecosystem of organizations. Also, innovative and engaging methods to access financial information or utilise financial services are influencing the segment’s rise.

By Service

• Payment
• Fund Transfer
• Personal Finance
• Loans
• Insurance
• Wealth Management

The payment segment is the leading category of the fintech market. The escalating frequency of digital payment transactions and the higher acceptance of online payment ways are driving the segment’s market share. Whereas, the fund transfer segment follows closely with heightening remittances and international money transfers.

By Application

• Banking
• Insurance
• Securities
• Others

Banking is the most prevailing segment in the fintech market. Banking advancements like peer-to-peer lending platforms, mobile payment apps and digital wallets are redefining the operations of traditional banking systems. Moreover, accessibility, cost-effectiveness and convenience are elevating the segment’s market size.

By Deployment Mode

• Cloud
• On-premises

Cloud is gaining more traction and is projected to propel further during the estimation period. This is because of the potential to adjust to fluctuating workloads and the costs saving benefits are adding to the segment’s dominance.

Regional analysis

Asia Pacific is the fastest-growing fintech market with over 880 deals of value 10.8 billion dollars in 2023. This rapid expansion is spearheaded by India, having more than 9000 fintech companies and an unprecedented rise in the Unified Payments Interface (UPI).

North America will continue an essential fintech market and is predicted to experience four times growth over the forecast period.

Recent happenings

·       In August 2024, Mastercard globally introduced its new Payment Passkey Service to enhance online shopping’s security and operability. It will first begin as a pilot in India with a few of the biggest payment aggregators, prominent banks and online merchants.

·       In July 2024, Toyota Financial Services Italy establishes a corporate collaboration with Fintech District. This is for Techfin and the fintech ecosystem in Italy of the international reference community.

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