Fintech is a combination of technology and financial services that has been transforming the way businesses operate. Over the years, the fintech industry has evolved in significant ways leading the transformation of companies towards a customer-centric business. Thus, finding place across a plethora of companies ranging from startups to tech companies to established firms all over the world. With either a collaborative or a challenging approach, financial services companies and tech companies have taken up each other’s lanes and progressing with disruptive and innovative propositions in an ever-evolving business landscape. In the recent years, many variations of fintech have emerged that use cutting edge technologies tailored for specific functions or sectors such as Insurtech, Regtech etc. Now that fintech industry is clearly more than a hype, the extent of execution achieved in organizations’ strategy gathers importance.
- Infrastructure-based technology, through platformification and open application programming interfaces (APIs), is reshaping the future of the financial services industry, while the operational advancements offered by robotic process automation (RPA), chatbots, and Distributed Ledger Technology (DLT) are enabling greater agility, efficiency, and accuracy.
- A large majority of global banks, insurers, and investment managers are planning to partner with financial technology companies over the next 3-5 years, and expect a 20% average return on investment on their innovation projects.
- Through innovative use of technologies, financial technology companies are delivering low-cost personalized products, which has a significant impact on the rising customer expectations, along with mounting pressure on traditional firms.
With a detailed note on various technologies driving the change, this report presents insights on Insurtech, Regtech and other segments along with a note on opportunities and challenges for the companies and regulatory bodies across the globe.
Key Market Trends
Insights of Small & Medium sized enterprises (SMEs) fintech adaption trends
Adoption of fintech services has been increasing on a rapid pace over the past 4 years among customers. Fintechs are helping the SMEs with their financial needs like banking and payments, financial management, financing, and insurance. In Asia, SMEs are crucial and represent 42% of GDP as well as responsible for half of all jobs. Yet SMEs receive just 18.7% of total bank credit in 2017. As per the World Bank statistics, expanding credit to SMEs is the need of the hour as creating atleast 1 million new jobs per month is required to cater to the Asia’s expanding workforce.
With 25% global adoption rate, this market shows a plenty of room for growth and opportunities for the fintech companies. In addition to credit financing, there are many other ways SMEs can been benefitted such as using APIs (open banking) and distributed ledger technologies to achieve process efficiency are a few examples in which the SMEs can be benefited by the fintech ecosystem.
Asia-Pacific to Witness the Highest Growth
Opportunities abound across the fast-evolving Asia-Pacific fintech landscape, and investment is rushing to tap into them. Open Banking and other regulatory initiatives are redefining financial services markets, with third-party providers ready to gain access to formerly proprietary bank customer data. While China and India experience much greater penetration rates for fintech services.
The report includes an overview of the major international players operating in the market studied. Currently, some of the major players dominating the market studied, in terms of market share.
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