Global Fintech Market (2018 – 2023)

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Global Fintech Market (2018 2023)

• April 20192019

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Key Questions Answered in this Report

• What is Covered?
• What is the historical, current, and forecasted
  market size data for the global fintech market
  for the segments based on services and
  technology?
• What is the historical, current and forecasted
  regional (North America, Europe, Asia-Pacific,
  Latin America, and the Middle East and Africa)
  market size data for the global fintech market?
• What are the regulations and initiatives in the
  fintech market in the different segments?
• What are the major drivers and challenges
  impacting the fintech market?
• What are the market trends and significant
  technological developments in the market?
• What is the competitive landscape, along with the
  profiles of the major public and private players
  operating in the market?

• What you get Impact
• Understand the demand for fintech for specific
  applications, in order to determine the viability
  of the business.
• Identify the developed and emerging markets where
  fintech is consumed.
• Determine optimal product positioning, and
  identify suitable distribution channels.
• Identify the gap areas and address them.
• Develop strategies based on industry standards
  and economic factors for the segments.
• Define competitive positioning by comparing the
  products and services with other key players in
  the market.

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Market Definition

• Payment/billing generates the highest revenue in
  the fintech market, followed by mortgage/real
  estate, money transfer/remittance, regtech, and
  insurtech. Others include lending, public
  finance, capital market, wealth management, and
  others.
• Based on Services
• Payments/Transactions This refers to enterprises
  whose business models involve the use of
  technology to offer services, and/or whose core
  businesses are based on the distributed ledger
  (Blockchain) technology or the usage of
  cryptocurrency (e.g. Bitcoin) for payments.
• Personal finance This refers to companies that
  offer technology-driven services to enhance
  retail customers' finances by assisting them to
  monitor savings, credit scores, spending, or tax
  liabilities. Fintech is used to offer retail
  banking services such as checking savings account
  balance outside the traditional brick and mortar
  bank branch.
• Insurtech This refers to companies employing
  technology to boost promptness, competence,
  accuracy, and convenience of processes across the
  insurance value chain. This includes insurance
  telematics, quote comparison websites, insurance
  domestics (home automation), corporate platforms,
  claims software, online brokers, cyber insurance,
  peer-to-peer insurance, underwriting software,
  and digital sales enabling.

• Regtech This refers to companies that offer
  technology-driven solutions to expedite and
  streamline compliance with reporting and
  regulations, as well as safeguards enterprises
  from employee and customer fraudulent cases.
• Based on Technology
• Blockchain/Cryptocurrency Cryptocurrency is a
  virtual medium of exchange, created and kept
  electronically in Blockchain, distinct from other
  currencies. Cryptographic technology is used to
  decentralize the securely verified transactions
  and creation of monetary units.
• Robotic process automation (RPA) RPA enables
  banks and other financial institutions to control
  data, process transactions, trigger responses,
  and communicate with other systems.
• Artificial Intelligence (AI) AI uses data
  science and machine learning to develop
  personalized products for consumers.
• Data analytics Predictive analytics can help
  fintech companies provide customers with an
  individualized experience.

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Executive Summary
Global FINTECH Market

• Overview
• The global fintech market is expected to expand
  at a CAGR of xx during the 2018-2023 period, and
  reach a value of USD xx Bn by 2023.
• Investments in the regtech and insurtech markets
  are expected to surge massively in the coming six
  months, in addition to substantial funding for
  facilitating technologies like Blockchain, AI,
  and RPA.

• Trends
• AI and Blockchain are expected to be priorities
  for fintech investors, followed by insurtech and
  regtech, during the forecast period (2018-2023).
• Factors such as rise in competition among new
  entrants, and growing global consensus on
  reducing remittance transaction fees are driving
  the penetration of digital channels.
• Fintech companies in the remittance market
  segment have been experiencing remarkable
  progress since the past few years. Due to growing
  awareness about money transfer, remittance
  through fintech solutions has increased.

Global Fintech Revenue (in USD Bn)
CAGR xx

• Drivers
• The boom in the e-commerce sector has driven the
  use of online payments and e-wallets, all over
  the world.
• Increasing demand for cryptocurrency has
  decreased the cost of transactions, and initial
  coin offerings (ICO), which is driving the
  fintech market.
• Due to the rising need to eliminate fraud and
  crime in the financial sector, dependency on
  outdated software and paperwork has decreased,
  and the adoption of fintech-based solutions by
  the financial companies has increased.

• Challenges
• Uncertain regulatory principles and frameworks,
  and lack of diverse Blockchain applications and
  use cases are expected to delay the growth of the
  market during the forecast period.
• Fintech firms are failing to keep up with the
  traditional financial companies because of the
  lack of human touch. Their functional models
  often leave clients feeling like they are dealing
  with some faceless entity.

Source Netscribes Analysis
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Market Drivers and Challenges
The infiltration of mobile devices and
technology-based solutions across regions is
propelling growth of the global fintech market.
However, regulatory and compliance challenges
continue to hinder its growth.

• Key Drivers
• Significant use of mobile devices and
  technology-based solutions are increasing the
  demand for financial and banking solutions, which
  can be accessed through personal devices. Banks
  and firms are investing heavily in
  technology-based solutions.
• The cost of compliance has increased for global
  institutions, since they now need to comply with
  regulatory norms across jurisdictions. The
  mounting cost of compliance has compelled many
  corporates to invest in regtech companies. The
  advent of financial regulations including Payment
  Services Directive 2 (PSD2), General Data
  Protection Regulation (GDPR), and Markets in
  Financial Instruments Directive II/Markets in
  Financial Instruments Regulation (MiFID II/MIFIR)
  have accelerated the investment in the last six
  months.
• The boom in the e-commerce sector has propelled
  the use of online payment methods and e-wallets,
  across the world. Enterprises, as well as
  individuals are trusting fintech companies with
  their data to transfer funds, make purchases
  online through e-commerce websites, and use
  e-wallets.

• Challenges
• One of the significant disruptions for the United
  Kingdom (UK) fintech is the introduction of GDPR.
  Financial firms, both old and new, have to invest
  substantial time and resources to certify that
  they comply with the new laws.
• Fending off cyber-attacks is one of the paramount
  challenges faced by firms and governments, all
  over the world. Given the complex nature of the
  client data that companies store, this is a
  severe concern for fintech firms. Cybercriminals
  are hurling more frequent and sophisticated
  attacks. It is quite evident, owing to the fact
  that the number of data breaches had amplified in
  2018.
• Fintech firms are lagging behind when compared to
  traditional financial companies. They lack in
  human touch. Their functional models often
  leave clients feeling like they are dealing with
  a faceless entity.

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Global Fintech Ecosystem Players and Clientele

• Fintech clientele
• Individuals
• Individual demand for fintech services is driven
  by rapid urbanization, mobile and Internet
  penetration, and ease of use. In established
  regions with high banking penetration, tech-savvy
  consumers are demand for a wide range of
  services, and better experience. In emerging
  markets, fintech firms are helping in enabling
  financial inclusion.
• Corporations and Small and Medium-sized
  Enterprises (SMEs)
• Limited financial history and other challenges
  leave SMEs underserved when it comes to acquiring
  financial benefits from traditional institutes.
  This unmet demand presents an opportunity for
  fintech companies. The digitalization of the
  lending process, including the assessment of
  credit risk, is providing SMEs with an
  alternative way of funding.
• Financial Institutes
• Across regions, banks are collaborating and
  investing in fintech companies to drive
  efficiency, offer new products, and improve
  customer experience. The aim is to incorporate
  fintech solutions across the value chain.
• Governments and Regulators
• Regulators are also collaborating with fintech
  firms and leveraging their capabilities to
  improve their processes.

Fintech Ecosystem
Players in the Fintech Ecosystem
Educational Institutions
Consumers
Financial Institutions
Regulators
Start-ups
Investors
Fintech companies
Robo-advisors and Personal Finance
RegTech
Payments and Remittances
Digital Banking
Insurtechs
Alternative Finance
Blockchain/DLT and Bitcoin
Digital Identity Verification
Note The start-ups and segments covered in the
Fintech Ecosystem are not exhaustive but
indicative only.
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Global Fintech Market Regulations and
Government Initiatives
Initiatives undertaken by governments to
encourage fintech companies

• To remain competitive and offer an environment
  that sanctions new initiatives, globally, firms
  are looking into enterprises with regards to open
  banking, which allow fintech firms to leverage on
  banks data to provide and extend their offerings
  to bank customers.
• Regulators are undertaking various approaches to
  provide regulatory oversight with the aim to
  protect consumers, and at the same time make the
  effort not to deter innovation.
• Various countries have adopted sandboxes to
  provide fintech firms with an environment to
  evolve and innovate. These fintech companies are
  able to launch products and services without the
  necessary licenses, which also allow regulators
  to have constant consultations with companies to
  gain a better understanding of the sector
• Some countries have created special economic
  zones to set up firms focused on innovation.
  Specific zones may be subjected to various
  regulations including lower taxes, permission to
  operate without necessary licenses (or with
  special licenses), etc.
• Regulators have been running consultations with
  industry players to understand the current
  industry scenario, and try to identify the
  necessary steps that need to be undertaken to
  protect the consumers while encouraging
  innovation
• Regulators of certain economies have successfully
  implemented guiding principles to enable fintech
  growth
• Countries have also rolled-out fintech related
  laws or licenses, allowing these firms to operate
  in the region without the requirement of a
  banking license
• Given the complexity of the fintech ecosystem and
  the existence of different guidelines across
  different countries, fintech industry
  associations and financial regulators are
  collaborating, globally, with the aim to share
  leading practices, experiences, and frameworks,
  thereby enabling the growth of fintech firms in
  different markets.
• To improve collaboration among regulators, the
  Global Financial Innovation Network (GFIN) was
  launched in August 2018 by 12 financial
  regulators. The network assisted innovative
  companies to interact efficiently with the
  regulators and originate new ideas. They would
  also create a new framework for cooperation among
  the financial services regulators on innovative
  topics.

• Given the potential and opportunities associated
  with the fintech industry, regulators and
  policymakers across the world are focusing on
  developing more functional fintech ecosystems
  through a range of policies and other
  interventions. Emerging economies are also
  encouraging investments in this industry, and
  trying to bring in frameworks that ensure a
  fintech-friendly environment.

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Market Overview
The North American fintech market has been
experiencing considerable growth lately, and is
expected to expand at a CAGR of xx during the
2018-2023 period to reach a value of USD 80.8 Bn
by 2023. This region is going to continue
attracting investors, owing to top notch
technology infrastructure and organized
regulatory sandbox.

• North America Fintech Market Revenue (USD Bn),
  2015-2023F

• North America Fintech Market USD xx Bn (2018)

• Market Trends
• In general a mature market, North America
  currently accounts for xx of the global fintech
  market share. This region has been witnessing
  continued growth driven by investments,
  particularly in 2018, with the US recording a
  5-year high on the back of 25 mega-rounds worth
  USD xx Bn.
• This region is also home to the maximum fintech
  start-ups with unicorn status. This region also
  witnessed fintech companies diversifying their
  current services. Banking-as-a-service (BaaS)
  platforms are facilitating fintech companies in
  the US to increase the number of bank accounts.
  Such diversification is expected to propel growth
  in the region.
• Given the opportunities, North America is
  anticipated to continue attracting investors.
  However, the recent investment trend indicates
  that investors are finding other regions more
  lucrative, and hence, North America is no longer
  powering the global fintech funding growth. This
  can lead to a slowdown of the overall fintech
  market growth in the region during the forecast
  period (2018-2023).

Source Netscribes Analysis
Source Netscribes Analysis
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Company Overview
Overview Key Investors Overview Key Investors
Description -Robinhood is headquartered in California, USA. Baiju Bhatt and Vlad Tenev founded the company in 2013. It is a stock brokerage company that offers mobile app services. It allows users to invest in publicly traded companies, ETFs listed on the US stock exchange, and cryptocurrencies, without paying any commission. Founded in - 2013 Headquarters - California, USA Number of employees 501-1000 Website- www.robinhood.com Industry Finance and Insurance Sequoia Capital Kleiner Perkins ICONIQ Capital DST Global Products/Services Investing The mobile-based app helps users invest in stocks, ETFs, options, and cryptocurrency without the need of a manual. Strategize and Execute Robinhood provides multi-leg options strategies for advanced traders. It analyzes candlestick charts, and trades on margin to enhance buying power. Cash Management It is yet to be launched by the company. Description - Ant Financial is headquartered in Hangzhou, China. The company was previously known as Alipay (part of Alibaba Group), but was rebranded as Ant Financial Services in 2014. Among the fintech companies all over the world, Ant Financial is one of the most valuable unicorn companies with a valuation of USD 150 Bn. Founded in - 2014 Headquarters - China Number of employees 5001-10000 Website - www.antfinancial.com Industry - Personal finance, Software China Investment Corporation China Construction Bank China Development Industrial Bank Products/Services Ant Financial offers an extensive range of financial services to individuals, as well as small and micro businesses, using technology such as Blockchain, AI, big data, cloud computing, and the Internet of Things (IoT). It has developed online platforms to deliver a wide array of products and solutions, covering payments, third-party insurance, loans, and wealth management that emphasize the financial requirements of small businesses, and individuals. The cloud and big data analytics direct their credit, security, and risk control processes, allowing them to offer tailor-made products.
Key People Key Initiatives Key People Key Initiatives
At the beginning of 2018, the CEO of Robinhood announced that the company is on its way to create initial public offering (IPO). Free trading option, and free cryptocurrency trading are vital factors that have contributed to the companys growth, and helped it become a millennial-friendly brokerage firm. In 2017, its customer base accounted for 4 Mn. 2015 Koubei was created as a result of a joint venture between Alibaba and Ant Financial. Ant Financial also launched Ant Fortune, which offers hundreds of products from about 80 Chinese fund institutions. 2017 Ant Financial introduced its facial recognition payment technology through its Alipay services. Fortune Account service platform was also launched. It allowed financial institutions to issue content and trade their own financial products through the platform.
Vladimir Tenev Co-founder
Eric Jing Chairman and CEO
Baiju Bhatt Co-founder
Simon Hu President
Li Cheng CTO, and International Business Groups
COO
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Appendix

• Research Methodology

Reporting The analyst then creates a report with
the support of his findings and analysis, with
help from an editorial team.
Problem identification The analyst identifies
key questions that he/she would like to address
from the market study. He/she describes the
major challenges that would help clients
understanding the industry, globally, or for a
specific region.
Defining objectives The analyst then defines the
research objectives and methodologies which form
the basis of the research.
Information gathering The next stage of research
is conducted utilizing secondary and primary
sources of information. They conduct an in-depth
study of the global market, identifying and
understanding its key stakeholders, drivers,
trends, challenges, and opportunities, covering
major regions such as North America, Latin
America, Europe, Asia-Pacific, and the Middle
East and Africa. Primary research complements
the secondary research, as and when required, as
it helps gain insights from the industries
directly, by communicating with senior
executives, key opinion leaders, and independent
consultants who are experts in their industries,
or specific industry sectors.
Analysis The qualitative and quantitative
findings from the previous stages are brought
together by specialists to perform a rigorous
analysis. The regional market trends, drivers,
and opportunities obtained during the analysis
are compared with regional economic indicators,
sector growth rates, population index, etc., to
ensure consistency of the data. After consistency
is ensured, these historical and present
indicators help to understand how the market will
perform in the future. The proprietary
forecasting model factors in all these indicators
to predict the future market accurately.
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Appendix

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