Fintech Market Forecast to Reach $161.2 Billion by 2026

Focus of Companies on Cost Reduction and Improving Efficiency driving the growth of Fintech Market

Hyderabad, India – July 24, 2021 /MarketersMedia/ —

The Fintech Market forecast to reach $161.2 billion by 2026, growing at a CAGR of 8.7% from 2021 to 2026. Artificial Intelligence (AI) has taken the tech world by storm, allowing companies to automate their high-value and complicated processes. The reason to make a shift towards machine learning is also motivated by reduction in cost, increasing efficiency, reducing error and better customer experience through improved digital lending, automated insurance and personal finance solutions. The Fintech is majorly driven by credit card fraud detection. With the help of Generative Adversarial Network, Artifical Intelligence can spot the difference between real data and hacked data in each transaction and send alert to banks. The biggest challenge with fintech is the sensitive issue of data privacy and security, which most fintech companies are facing. The fintech sector is governed by strict compliance to regulations and governance since any data breach or security failure could be disastrous.

Fintech Market Segment Analysis – By Service

In FinTech sector transaction type segment discuss about the payments, financial institution and insurance. Insurance occupied the largest market share in 2020 at 16.5%. The use of FinTech technology across the financial services industry is growing. Emergence of services such as PayTech, RegTech, InsurTech, and digital banking highlight the ways in which digitalization has impacted the FinTech industry. These consumer demand in improved access and anytime anywhere services is achieving greater transparency and will lead the market in the period of 2021-2026.

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Fintech Market Segment Analysis – By Technology

AI is the fastest growing segment at 21.6% through 2026. AI can be used to find the relation between world events and their impact on prices by using predictive analysis. This information is very useful for any kind of wealth investment. AI in financial services are used to protect the details of their customer. AI is playing major role by quickly assessing the large algorithms to protect from fraudulent cases. AI is used to advise the accurate result. P2P organization analyze their potential customer’s behavior and detect all the risk in the cooperation with that particular customer.AI also helps in analyses consumer’s details who doesn’t have past credit history or his credit history is destroyed.

Fintech Market Segment Analysis – By Geography

APAC region holds the largest market share in the Fintech Market at 34% in 2020. However, Asia Pacific is also set to witness highest growth during the forecast period. North American Fintech Market is mainly driven by the large number of startups and emerged companies offering AI services to financial services. The key applications include Virtual Assistant, Business Analytics & Reporting, Customer Behavioral Analytics among others.

Fintech Market Drivers

Focus of Companies on Cost Reduction and Improving Efficiency

Fintech is allowing companies to cut down their cost, automate their process and reduce the chances of error. AI Chatbots are used by companies as customer assistants for various purposes such as sales, customer care executive (over phone), and online chat executive. AI is empowering small finance companies as it is affordable as well as chances of error occurrence is very low. In addition, the insightful details about the cash flow and income and expense is gaining the traction from the end user as this helps companies to reduce their expenses.

New Technological Advancements drives Adoption of Fintech

According to McAfee cybercrime currently costs the global economy around $600 billion, or 0.8% of global GDP. One of the biggest cybercrimes is credit card fraud. Thus companies are designing a new generation of algorithms that are Convolutional Neural Networks and are based on the visual cortex, which is a small segment of cells that are sensitive to specific regions of the visual field in the human body. This means that they are able to extract elementary visual features like oriented edges, end-points and corners. This technology can study the spending data of an individual and be able to determine, based on this information, whether they performed the most recent transaction on their credit card or if someone else was using their credit card data.

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Fintech Market Challenges

Concerns Regarding Data Privacy

The biggest challenge with technology adoption in fintech is the sensitive issue of data privacy and security, which most fintech companies are facing. The fintech sector is governed by strict compliance to regulations and governance since any data breach or security failure could be disastrous. Privacy concerns are cropping up as companies feed more and more consumer and vendor data into advanced technologies whether it is analytics, AI or blockchain to create new bits of sensitive information, unbeknownst to affected consumers and employees.

Fintech Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Fintech Market. Microsoft, Google, IBM, Intel, Affirm, Upstart, Sigmoidal, Zest Finance and Amazon are considered to be the key players of the Fintech Market.

Acquisitions/Technology Launches/Partnerships

In May 2021, Healthcare Fintech Cedar announced a $425 million acquisition of San Francisco-based OODA Health for a mix of cash and equity. The move was fueled by a $200 million Series D cash injection in March led by Tiger Global Management
In May 2021, Corporate finance software provider Bill.com LLC has signed a $2.5 billion deal to acquire DivvyPay Inc., better known as Divvy, whose cloud service enables companies to issue business credit cards to their employees.

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