Last updated on November 8th, 2022
The fintech sector has seen a lot of growth in recent years, with investors pumping in a lot of money into startups in the space. This is partly due to the fact that several factors drive the growth of fintech.
In this blog post, I’ll take a look at three of the most important drivers of fintech growth.
3 Drivers of Fintech Growth
First, new technologies are emerging in several industries that can be applied to financial services.
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For example, the internet of things allows for the development of new products and services that can make banking more efficient and convenient for customers.
In addition, customer expectations are changing, and they are increasingly looking for alternatives to traditional banking products and services.
Finally, regulatory changes make it easier for startups to enter the financial services market. Let’s take a closer look at each of these drivers.
New Technologies Are Driving Fintech Innovation
One of the most critical drivers of fintech innovation is the emergence of new technologies in other industries that can be applied to financial services.
For example, the internet of things opens up new possibilities for product development and service delivery in banking.
Banks can now offer customers more convenient and efficient banking experiences using IoT-enabled devices such as ATMs, credit cards, and mobile apps.
In addition, blockchain technology provides a new way to streamline financial transactions and reduce costs.
As these and other new technologies are applied to financial services, we expect continued innovation in the fintech sector.
Customer Expectations Are Changing
Another driver of fintech growth is changing customer expectations.
Customers are increasingly looking for alternatives to traditional banking products and services. They want more convenient and user-friendly experiences that meet their needs on their terms. This has created opportunities for fintech startups to develop innovative products and services that address these needs.
Customers are becoming more comfortable with using digital channels for their financial needs. This shift has been driven by factors such as the increasing availability of high-speed internet access and mobile devices.
As customers continue to embrace digital channels for their banking needs, we expect continued growth in the fintech sector.
Regulatory Changes Are Facilitating Fintech Growth
Regulatory changes make it easier for startups to enter the financial services market. In particular, recent changes have made it easier for companies to obtain banking licenses and access capital markets.
These changes have lowered barriers to entry and created opportunities for innovation in financial services. As a result, we can expect continued growth in the fintech sector as more startups enter the market with innovative products and services.
The rise of mobile payments
In 2014, the fintech sector received a massive influx of funds from investors. This injection of capital helped to fuel the growth of many startups and established firms, leading to an increase in the number of products and services available to consumers.
One of the most notable outcomes of this funding boom was the rise of mobile payments, which allowed people to make transactions using their smartphones.
This convenience quickly became popular, and today, mobile payments are used by billions of people worldwide.
The fintech sector has also made other significant contributions, such as developing new online banking methods and providing access to financial services for underserved populations.
Hungry Startups
The banking sector is ripe for disruption. For too long, banks have been slow to adopt new technologies and have failed to meet the needs of their customers. But that is starting to change, thanks to a new wave of startups that are hungry for change.
These companies attract funding from investors who see their potential to shake up the status quo. They are developing innovative new products and services designed to make banking more accessible and more convenient for consumers. And they are doing all of this at a time when consumers are increasingly dissatisfied with their banks.
As a result, the banking sector is finally starting to feel the heat from these nimble startups. It’s about time.
Frequently Asked Questions
How fast is fintech growing?
The global fintech market is expected to be worth USD 324 billion by 2026, growing at a compound annual growth rate (CAGR) of 25.18%. It was valued at just USD 112.5 billion in 2021 and USD 131.95 billion in 2022. (Source)
What are the key players in fintech?
The current top 5 are GoTo, Visa, Mastercard, Ant Financial, and Intuit. (Source)
Is PayPal a fintech company?
Yes, PayPal is a leading example of a fintech company. It was among the first companies to develop online payment platforms and has pioneered new technologies that have transformed digital payments.
Which region is leading in fintech growth?
While fintech is a global phenomenon, some regions are seeing more rapid growth than others. According to recent reports, North America has the largest market share of the fintech market. It is expected to continue to lead in terms of investment and innovation in this space. Other regions that are experiencing strong growth include Europe, Asia Pacific, and the Middle East. (Source)
To summarize
I have been following the fintech industry for a while now, and I can say that it is rapidly growing and evolving.
Several factors have contributed to this flourishing industry, including new technologies emerging in several industries that can be applied to financial services, customer expectations, and regulatory changes.
New technologies such as blockchain and artificial intelligence are being applied to create new financial products and services that are more efficient and secure. At the same time, customers are becoming more aware of the potential of fintech and are demanding more innovative solutions from traditional financial institutions.
Regulatory changes in recent years have made it easier for fintech companies to operate and have helped to foster a more supportive environment for innovation. This is excellent news for the fintech industry, as it allows for continued growth and expansion. As more and more startups enter the market, we can expect to see continued innovation and growth in the years ahead.
Overall, it is clear that fintech is an exciting and rapidly-growing industry with a lot of potential for future development. Whether you are an investor looking for promising opportunities or simply someone who wants greater access to
