These Fintech Statistics Show an Industry on the Rise
The term fintech (financial technology) refers to innovative tech solutions that aim to optimize banking and financial services. Technologies such as blockchain and artificial intelligence are ushering in new ways of doing business in the financial industry and creating additional options for digital banking users.
Over the past several years, the financial industry has been buzzing about the disruptions fintech startups are causing by providing consumers with alternatives to traditional money services. In line with this new approach, most established companies have integrated fintech solutions in their regular offer.
Follow us on YouTube:
The financial technology sector encompasses payment processing, banking, insurance, loans, and wealth management. Each of these fields is getting a digital facelift, and the latest fintech statistics tell us this venture has been largely successful.
On the consumer side of the global financial industry, people now expect a seamless digital experience when handling their funds, including robust mobile banking apps, so financial institutions must provide that if they want to stay afloat. As a result, partnerships and mergers between established companies and fintech startups have become relatively frequent.
It isn’t rare for a fintech business with a business-to-consumer model to adopt a business-to-business approach, either. This actually widens its client pool by extending its offer to the customer bases of much larger companies.
We’ve created this fintech industry overview - replete with a hand-picked collection of exciting statistics - to give you an idea of how fintech services have already changed the market and what the future may hold.
Fintech Statistics - Editor’s Choice
- Fintech bank assets grew by 105% from 2013 to 2022, while traditional bank assets grew by 75%.
- Fintech companies acquired $210 billion in global investments in 2021.
- As of October 2022, there were 323 unicorn fintech companies worldwide.
- The per-share value of the Global X Fintech ETF halved from $52 in 2021 to $21 in 2022.
- The total transaction value of digital payments is expected to reach $8.49 trillion by the end of 2022.
- Insurance fintech companies raised about $15 billion in investments in 2021.
- By the end of 2022, 42.5% of motor insurance premiums in the US will be sold using online sales.
Relations Between Established Financial Giants and Fintech Innovators
Fintech bank assets grew by 105% from 2013 to 2022, while traditional bank assets grew by 75%.
Although some might still be skeptical about the value of this relatively new industry, there’s no denying the fintech trends showcasing its rapid growth. This speed of development is in line with the predictions of global finance leaders from 2017, 88% of whom saw this new technology as a threat to their existing business model.
The total value of assets in decentralized finance (DeFi) was around $90 billion in December 2021.
In 2017, 77% of global financial services planned to adopt some sort of decentralized finance system (like the blockchain). This was driven by the need to improve retention rate statistics, as the fintech industry’s convenience and speed attracted more and more customers. The joint results of traditional financial institutions adopting DeFi tools and the crypto boom from a few years ago have led to this incredible asset growth.
Only 28% of traditional banks have the tools to use customer data for AI-based personalization.
A few years ago, 61% of bank executives considered the development of a customer-centric model, which would give them the opportunity to act on clients’ needs in real time, extremely important. However, in 2022, under a third of banks have the capacity to implement this kind of solution.
66% of customers expect financial institutions to digitize everything from customer interaction to sales and service models, and descale brick-and-mortar infrastructure by 2025.
The fintech market has proven that more-or-less total transition to digital banking is what consumers want, and financial institutions are expected to follow suit. What’s more, most digital banking users (58%) also expect “big tech” to make further inroads into the banking market.
The old and new schools will have to find a way to settle their differences on the fly, as more fintech companies are turning away from a purely B2C business model and selling their solutions to their former adversaries (i.e., traditional financial services), who in turn want to purchase the technology they cannot build themselves (e.g., mobile banking support).
Fintech Stock and Market Statistics
According to the latest fintech industry report, fintech companies acquired $210 billion in global investments in 2021.
This impressive number is the result of 5,684 investment deals - almost twice as many as in 2020. In the Americas, there were seven venture capital funding rounds that surpassed $1 billion; of that, the two biggest rounds were for US-based companies Generate and Chime. They received $2 billion and $1.1 billion, respectively.
Fintech investment reached $107.8 billion in the first half of 2022, with the market shifting towards the Asia-Pacific region.
Fintech hubs are sprouting up all over the world and helping the rise of new markets, which resulted in a total of 2,980 deals. At this rate, 2022 investing in fintech is on track to surpass the previous year.
However, investments in the usual hotspots - the Americas and the European region - declined. On the other hand, the Asia-Pacific region recorded a new yearly high in terms of the investment amount, despite fewer total deals. This was primarily driven by Block’s $27.9 billion purchase of Afterpay, a fintech based in Australia.
Global venture capital activity in the fintech market dropped from $66.5 billion in H2 2021 to $52.6 billion in H1 2022.
A growing number of financial corporations have been investing in financial technology companies over the last few years due to having realized that innovations are necessary to stay afloat. Interest in investments and partnerships is growing, with more fintech companies opting to provide B2B services to incumbent financial companies.
However, the overwhelming VC enthusiasm from 2021 seems to have subsided, as investors are now looking to make more careful investments in the fintech sector, cherry-picking their target startups.
In 2018, Chinese payment service Ant Financial had the biggest round of investments in history, with $14 billion raised.
This wasn’t just a record for the global fintech market but investment history as a whole. Of this amount, $10 billion came in dollars, while the rest was invested in Chinese yuan.
The platform provides digital financial services for almost two billion people. It spun off from the eCommerce platform Alibaba before its listing in 2004. Millennial fintech app statistics show China and many other societies are getting closer to becoming completely cashless as online native generations mature.
As of October 2022, there were 323 unicorn fintech companies in the world.
A unicorn company is a private company with a valuation of over $1 billion. Variants include decacorns, valued at over $10 billion, and hectocorns, valued at over $100 billion. When it comes to fintech unicorns, statistics show that the number of fintech startups surpassing the $1 billion valuation has quadrupled since January 2021.
The APAC fintech market size is expected to grow with a compound annual growth rate (CAGR) of 22.1% from 2021 to 2030.
(Allied Market Research)
According to some predictions, Asia’s fintech industry size will outgrow that of the US, making it the largest in the world. This predicted rate of growth is certainly the highest in the global fintech sphere at the moment.
The per-share value of the Global X Fintech ETF halved from $52 in 2021 to $21 in 2022.
The Global X Fintech fund facilitates access to investment opportunities in the fintech industry. The share price and overall health of the stock rose steadily in value up to the end of 2021, but have since been rapidly dropping. This year, they fell to less than half of their highest recorded value.
San Francisco-based Stripe, worth $95 billion, is perched atop the list of America’s largest financial technology companies.
Founded in 2011, Stripe started as a payment-processing service for small businesses. Nowadays, the company’s clients include the likes of Facebook and Amazon. With these big names on board, Stripe’s value has skyrocketed, and it processed $640 billion in payments in 2021, representing a 60% increase compared to the previous year. It is now the fourth-biggest privately owned company in the world and one of the leaders of the global fintech market.
Stats About Different Fintech Areas
Digital banking services are taking over the youth market in Brazil: Nearly 60% of people under 35 use neobanks instead of traditional banks.
With the “digital native” generation maturing, standing in line to pay your bills is quickly becoming outdated. So, if traditional banks fail to take the fintech industry seriously, their future could be in jeopardy.
Moreover, digital banking is much more convenient and affordable for lower-income segments of the population; as a result, around 60% of Brazilians from this bracket prefer neobanks.
In 2021, the bank-owned fintech payment processing platform Zelle had a bigger payment volume ($490 billion) than Venmo and Cash App combined ($405 billion in total).
Fintech payment systems perform two key functions: storing and transferring payments. Consumers use these applications to pay for goods and services directly, as well as make peer-to-peer fund transfers via their mobile devices.
Created by the biggest banks in the US, Zelle is a platform that links digital payments directly to the customer’s primary bank account. This model has proven extremely convenient, allowing the big banks to regain some of their share of the digital wallet market.
For 55% of the US population, safety fears about sharing financial data are the biggest deterrent to adopting digital services and open banking.
(Discover Global Network)
Companies supplying fintech payment solutions need to invest in patching up security holes and show consumers that the convenience of their services outweighs everything else. If they can do this, their market share is sure to grow.
37% of Gen X and Millennial affluent mobile bank customers use their app of choice a few times a week, while 31% use it several times a day.
Comparatively speaking, older generations use mobile banking much less often. Statistics for fintech show that 40% of users from this age group only fire up their apps once a week or less. Interestingly enough, younger customers also visit branches more often.
The total transaction value of digital payments is expected to reach $8.49 trillion by the end of 2022.
Digital payments are, without a doubt, the main driving force behind the fintech sector. So far, payment value has surpassed the 12.8% projected CAGR from 2019 to 2023, as the original value expected for 2023 was $6.7 trillion, a goal already reached in 2022.
Chatbots will save banks $7.3 billion by 2023.
That’s a 3,400% increase compared to $209 million, the figure recorded in 2019. Chatting with a robot can be much easier than talking to a human for everyone involved.
It turns out many customers prefer to chat with automated customer service operators, while banks appreciate the fact that they don’t ask for a salary and never take cigarette breaks.
As natural language processing advances, artificial intelligence is becoming increasingly important for fintech in the US.
Artificial intelligence will save the insurance industry nearly $1.3 billion by 2023.
There’s a lot of talk about the disruptive nature of fintech. Artificial intelligence plays a significant role in that.
In the insurance industry, computers can automate post-incident data collection, analyze photos of accident scenes, and perform many other functions that reduce the time and money required for insurers to settle claims. This is expected to save the industry $1.3 billion by 2023.
By the end of 2022, 42.5% of motor insurance premiums in the US will be sold using online sales.
According to the latest fintech industry analysis, $90.1 billion worth of auto insurance policies will be sold by the direct response method in 2022.
The auto insurance sector has been among the easiest for fintech to penetrate, with insurtech startups bringing innovation to policy design, user experience, and data analysis.
Insurance fintech companies raised about $15 billion in investments in 2021.
Of these, the biggest niches were business and employee insurance (e.g., Newfront Insurance with $300 million raised) and cyber insurance (e.g., Coalition with $520 million raised).
Fintech statistics tell us that the growth of this sector is slower than other fintech startups, but it has proven to be a robust market, nonetheless.
The number of new funding deals for insurtech startups peaked in 2021, when 470 new fintech firms received money.
Initially, investors were mainly focused on startup growth rather than profitability. However, in recent times, insurtech companies began downsizing as the global fintech market stabilized, which is why investments have been less bountiful and more cautious after peaking in 2021.
The number of fintech startups from this sector that brokered funding deals in H1 2022 was only 187.
Fintech startups dealing with wealth management have a projected CAGR of 16.8% from 2020 to 2030, the highest among all wealth-management provider types.
(Allied Market Research)
Fintech firms tend to provide low-fee or no-fee stock trading and robo-advisor services, which lead to smaller profit margins. However, their increased efficiency and transparency in delivering this type of financial services is expected to significantly speed up their growth in this decade.
As a result, they’re expected to carve out an even bigger chunk of the global financial services market by working with more high-net-worth individuals.
Global fintech statistics for 2021 tell us that the digital lending market earned $10.5 billion that year.
(Vantage Market Research)
This financial sector is projected to reach $22.4 billion in revenue by 2028. There are three main types of digital lending: personal loans, business loans, and student-focused loans. While most companies have one type of loan as their forte, many end up creating hybrid loans to keep up with the traditional and digital lending market.
VC funding for blockchain startups reached 25.4 billion in 2021.
When it comes to fintech, the blockchain is gaining momentum, and the technology’s funding shows investors think it emerged from its proof-of-concept phase.
However, while venture capitalists invested more than ever in crypto startups in Q1 2022 ($10.9 billion), as the crypto market took a nosedive later in the year, so did its funding. According to fintech statistics for Q3 2022, investors “only” gave $4.4 billion to fledgling blockchain companies - a 38% drop, year over year.
Which is the biggest fintech in the world?
The list of the top fintech companies is crowned by GoTo, an Indonesian enterprise with a market capitalization of $2.846 trillion as of November 1, 2022. Coming in second is Visa Inc, with a market capitalization of $421.83 billion, followed by Mastercard, with a market capitalization of $306.71 billion.
Who uses fintech the most?
Fintech is most commonly used by millennials. About 95% of this generation uses fintech products, and they're more than twice as likely to use them than baby boomers, for example.
This is primarily due to the fact that millennials are more comfortable with technology and are more likely to adopt new ways of conducting banking transactions quickly. They're also more likely to be comfortable using mobile payments and sharing their personal information online, making them prime targets for fintech products.
What is the biggest fintech transaction segment?
Payments are the biggest fintech transaction segment by consumer adoption, with 86% of them using it for this purpose. This segment covers a wide range of activities, from person-to-person payments to card and mobile payments. Other popular fintech segments include budgeting/personal finance (used by 43% of consumers), investments (27% of users), loans (18% of users), and crypto (10% of users).
Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.
More from blog
Your email address will not be published.