Financial technology or as we more commonly hear “Fintech” is innovation of new tools and products to automate the use and delivery of financial services. It is getting more popular day by day due to the need for easier and faster transactions in every area of life. This field has emerged in the 21st century with more focus on banks and financial institutions. However, as the years passed by, the focus has shifted to consumer meaning that new investments and innovations in this field are aimed at simplifying the process for consumers.

Fintech With Numbers

Fintech companies have gained increasing attention globally for the last 20 years. They have gained more investment and created more value for economies continually. Now let’s take a look at how this attention has turned into numbers. 

According to the latest industry report by KPMG, Fintech companies acquired $135.7 billion globally in investments during 2019.

In 2015 Goldman Sachs estimated that financial technology companies may obtain $4.7 trillion of revenue that traditional financial services are currently making.

According to Cornerstone Advisors, 60% of credit unions and 49% of banks in the U.S. believe that making partnerships with fintech companies is of value. 

McKinsey estimated that 25% of the financial technology market is consisting of digital payment products.

KPMG found that in 2018, $22.65 billion has been raised from 516 deals in Asia’s fintech market, which put Asia in the second spot globally.

Who are The Key Players in This Market?

Fintech ecosystem consists of firms who produce the technology, financial institutions and companies who are the users of fintech products and individual consumers. Main customers for the fintech market are banks, business partners of banks and small companies. Firms who produce the financial technology can be categorized as follows;

Producers of digital cash and cryptocurrency,

Open banking businesses,

Insurtech firms that seek to combience insurance with technological methods,

Blockchain technology,

Cybersecurity companies which deal with cybercrime and decentralized storage of data,

Regulatory Technology which aims to benefit financial companies in meeting compliance rules such as Know Your Customer and Anti-Money Laundering rules,

Roboadvisers which create financial instruments and advice based on algorithms.

What Awaits Financial Technology?

As 2020 is coming to an end, what can financial technology companies await from 2021. Will investments and innovation increase or will Covid 19 hit this field as well? Although the first quarter of 2020 demonstrated a decrease in investments made in fintech, many financial organizations still plan to collaborate with fintech companies. 82% of conventional financial companies aim to increase their partnership with fintech firms in upcoming three to five years, according to a new report by PwC. Market Data Forecast expects the fintech market to grow 22% between 2020 and 2025 and has the market value of $305 billion by 2025. All these estimates show that although Covid 19 has impacted the sector slightly, there is no sign of slowing for fintech companies in near future.