The market for Fintech is 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.
Report Coverage
The report: “Fintech Market– Forecast (2021-2026)”, by IndustryARC covers an in-depth analysis of the following segments of the Fintech Market.
By Services : Payments, Fund Transfer, wealth Management, personal Loans and P2P Lending, Insurance, personal Finance and others
By Technology : AI, Blockchain, Analytics, Mobile Commerce, Cyrptography, Cloud Infrastructure, Biometrics, RPA, Cyber Security and Others
By Application : Retail Banking, Investment Banking, Hedge Funds, Stock Trading Firms and Others
By Geography : North America (U.S, Canada, Mexico), Europe (Germany, UK, France, Italy, Spain, Russia and Others), APAC(China, Japan India, SK, Australia and Others), South America(Brazil, Argentina and others), and RoW (Middle east and Africa).
Key Takeaways
- Advent of technology is bringing up a new breakthrough every now and then and AI has certainly changed the way of data collection, data integration, analysis and deployment.
- As far as financial technology is concerned, the trend of these “robo-advisors” has brought in a drastic improvement in customer interaction and customized revenues.
- Systems such as chatbots, voice systems, and text chats are designed to replace the human intervention while being cost efficient. They are even intended to recognize and prevent fraud attempts. On the other hand, automated financial assistants and planners became handy in monitoring events and help customers in making financial decisions.
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.
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. This growing list of applications will be the major driver of adoption of AI in Fintech sector. Another application driven by new technology developments has been robo advisors. Robo- advisor keep monitoring on the events, stocks, bond and price trend according to user’s requirement which help them in making suggestion regarding which stock needs to be sell or buy. They play very important role in risk management, speech recognition, network security access to big data etc. These technology developments will create new avenues of opportunity for Fintech thereby driving the market growth.
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.
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