Fintech, a sector known for opportunities and potential, is often a subject of discussion for entrepreneurs and business leaders. Fintech simply joins finance and technology reinforced by digital transformation.
When finance and technology combine forces, they deliver a faster, better, more feasible way to deal with finance. For businesses and startups, it’s a goldmine. Any business capable of adding value or solving people’s pain points while making money will trend upward in this sector. For instance, just consider digital banking. How often do you go to brick-and-mortar banks nowadays?
Digital banking platforms have made it easy for people to access financial products through their laptops or mobile. It transformed customer interactions and merged into more multichannel operations. Fintech is changing how people and businesses manage money or assets. The trends and statistics below say it loud and clear.
Look at some exciting statistics to understand where fintech is and where it’s heading in 2023.
Artificial intelligence (AI) and machine learning (ML) will play a significant role in fintech as more tech-heavy startups enter the limelight. The statistics below explore this and many of the latest market trends.
- As of 2023, the fintech space is worth over $226 billion.
- The Nasdaq, home to numerous leading tech firms globally, showcases 463 fintech-related stocks.
- By the second quarter of 2022, Asia accounted for 24% of global fintech deals, positioning itself as the region with the second-highest deal volume after the US.
- 90% of global fintech companies already heavily rely on artificial intelligence and machine learning.
- 64% of people worldwide used fintech applications back in 2019.
11,651
fintech startups are based out of the United States of America, as per 2023 data.
Source: Statista
- Digital banking usage in the US grew to encompass 65.3% of its residents in 2022.
- 9 million households in the US without bank accounts spend an estimated $200 to $500 annually on services like check cashing. Digital direct deposits via fintech present a solution to bypass fees.
- It’s approximated that using artificial intelligence will save the insurance industry almost $1.3 billion by 2023.
- 56% of professionals identified information security and privacy as threats to the rise of fintech.
Digital payment statistics
The digital payments landscape is rapidly evolving, with new technologies and trends always emerging. The stats listed below give us a clear picture of how much digital transactions have grown and where they’re headed.
- The Unified Payments Interface (UPI) platforms saw the most transactions ever in March 2024 – 13.4 Billion.
- By 2025, daily transactions on UPI could reach 1 Billion.
- In 2022, digital payments grew by 76% in transactions and 91% in value.
- The number of places where digital payments are accepted rose from 170 million to 260 Million, a 53% increase.
- Over 3.5 billion people will be using fintech for payments by 2024.
- There will be about 4,805 million digital payment users by 2028.
Investment and funding statistics
Great potential and opportunities attract investors and entrepreneurs alike. Founders aspire to build, while investors take upfront risks to gain substantial profits later. The fintech sector saw huge investments from venture capitalists and investment firms with its promised – and sizable – future returns. The statistics below break down the size of these investments and the number of successful deals.
- In 2022’s first quarter, global fintech funding deals reached 1,482. That’s 20% growth from 2021 Q1.
- The challenging economic onset of 2022 led to a 33% quarter-on-quarter decline in global fintech investments during Q2.
- The global venture capital investment in fintech in 2022 was $92.2 billion.
- Funding for the wealth tech domain experienced a surge of 36% quarter-on-quarter in 2022, boasting over 180 finalized deals.
- Venture capital engagements surpassed 1,200 deals in Q2 2022.
- From 2021 through the second quarter of 2022, the US led in fintech investments at 38% by the end of the quarter.
Fintech application trends
As fintech started evolving, people welcomed many applications and technologies. Money management tools, payment gateways, and cryptocurrency custody software remained at the forefront. The statistics below show how users responded to applications that brought financial products and institutions closer to them.
- Visa is the largest fintech company with a valuation of almost half a trillion USD.
- GoHenry, a money management tool from the UK, has over a million paying users. It experienced a search growth surge of 1,260% from 2018 to 2022.
- M1 Finance, an American financial services company, secured $323 million in its series E investment round.
- The fintech enterprise Revolut has amassed funding exceeding $1.7 billion.
- $29,600 is the estimated transaction value per FinTech user by 2027.
- ARK Invest holds one of the most prominent fintech electronically traded funds (ETFs), encompassing over 630,000 shares spread over 31 unique stocks.
- Upon its 2021 public debut, Coinbase’s market valuation on the Nasdaq surpassed the $100 billion mark.
Fintech adoption and growth statistics
As per the statistics below, the industry is shifting toward fintech’s adoption over conventional banking systems. There’s an increased use of chatbots in banking sectors. People’s preference toward cryptocurrency is dynamically adjusting. Let’s explore these statistics to discover growth prospects in the fintech sector.
- Banks started reducing costs by setting up chatbots and saved $7.3 billion in 2023.
- The Indian fintech market produced 15 unicorns with a total investment of $8 billion in 2021.
- The Fintech sector will register a compound annual growth rate (CAGR) of 9.6%, making the market worth $37 billion by 2026.
- Global venture capital investment in fintech firms climbed from $48.9 billion in 2020 to $131.5 billion in 2021.
- One in ten individuals holds some variant of cryptocurrency.
- AI-powered fraud detection systems minimize the time of fraud investigations by 70% while increasing accuracy by 90%.
- The global fintech market is projected to reach $188 billion by 2024.
- In 2023, the amount of money invested in fintech was the lowest since 2017.
- As of January 2024, the Americas (including North America, South America, Central America, and the Caribbean) had the most fintech companies in the world.
People and their preferences in fintech
The statistics below discuss everything related to people and the fintech sector. Whether it’s their preference for services or applications, level of trust, or desire for a better experience, you’ll learn nuances that tie people to this side of the industry, where finance and technology meet.
- Jack Dorsey, Twitter’s former CEO, holds 12.7% of all outstanding shares in the fintech firm Square, for 50.8 million.
- A 223% increase was observed in advertised fintech jobs in the US in 2021.
- In the US, 13% of adults are minimally serviced by banks, while 5% need more banking services.
- 16.1% of people without banking accounts in the US distrust conventional banking institutions.
- From 2021 to 2022, 10% of the US populace resorted to buy now, pay later (BNPL) services or installment loan services.
- Over 21 million Americans, about 11% of the population, lack a government-issued ID, which poses challenges in acquiring standard bank accounts.
- The annual financial toll for those without a bank account is approximately $196.50, predominantly from prepaid debit card expenses.
- Fintech firms resonate more with younger generations. Among those aged 18 to 24, 51% trust fintech entities, and 49% of those aged 25 to 34 do the same. In comparison, traditional banks secure the confidence of only 39% and 42% of these age groups, respectively.
- 56% of people without a bank do not intend to open a checking or savings account in the future.
- Experian’s consumer survey reveals that 56% of consumers are open to sharing their contact details, and 42% are willing to provide personal information to financial bodies if it enhances their service experience.
- 24% of those without banking services still need to complete high school.
- Financial institutions saved roughly $7.3 billion in 2023 using chatbots.
Blockchain in fintech
As an evolving sector, fintech follows technological evolution. Recent developments indicate the rising adoption of decentralized infrastructure in financial technology. Blockchain simply represents a starting point. The benefits it brings to the fintech sector encourage people to try to take advantage of it.
- Two of every five financial services firms believe blockchain will revolutionize service delivery.
- Global expenditures on blockchain-related solutions totaled $6.6 billion in 2021, and forecasts suggest they will rise to $20 billion by 2024.
- Digital lending is expected to rise to $567.3 billion in 2026 with a CAGR of 26.6%
Make financial technology secure
Financial services deal with a lot of sensitive information. If exposed, theft or exploitation may follow, compromising user data. With the rise of fintech, this kind of information is processed digitally, and—lacking proper safeguards—malicious hackers can access it. But with identity governance, the control is back in your hands.
Learn more about identity governance and how to set up a system to secure fintech assets.
Sagar Joshi is a former content marketing specialist at G2 in India. He is an engineer with a keen interest in data analytics and cybersecurity. He writes about topics related to them. You can find him reading books, learning a new language, or playing pool in his free time.
