Financial technology has experienced widespread adoption across various industries in recent years. It has played a significant role in enhancing organizational development, leading to improved productivity and financial performance. Organizations that delayed integrating financial technologies subsequently faced challenges in maintaining their competitive edge.
Fintech traditionally requires substantial initial investment. However, data indicates that the returns on this investment can be highly advantageous, leading to optimized performance within a company's financial operations. The emergence of cutting-edge technologies such as artificial intelligence and blockchain has enabled many organizations to adopt alternative approaches that enhance efficiency and boost productivity.
The spread of financial technologies concerns various areas of activity:
Many companies that were the first to introduce financial technologies into their activities have become world market leaders: Apple, Samsung, PayPal, Amazon, Goldman Sachs, and JP Morgan.
Let's consider some statistics confirming that financial technologies are an integral part of the future of all fields of activity. There are compelling arguments to support the adoption of fintech across the various business models of many organizations.
It is assumed that the global financial area will soon be valued at 26.5 trillion US dollars with an average annual growth rate of 6%.
In 2020 alone, the fintech market quota between 48 fintech giants reached $187 billion, more than 1% of the global financial industry. 60% of credit communities and 49% of US banks are sure that using financial technologies is essential.
The most significant financial technology products are electronic payment systems, which account for 25% of the financial market.
Investment in fintech remains strong around the world. In recent years, global funding has reached hundreds of billions of dollars through venture capital, mergers, and private equity deals. Large technology firms and financial institutions continue to invest in digital payment platforms, lending services, and financial infrastructure.
The United States remains one of the main centers of fintech investment. Many of the largest deals happen there, especially in payment technology, online lending, and digital banking. Investors also pay close attention to companies which operate at the intersection of finance and software. Large financial hubs like New York and San Francisco continue to attract both startup founders and venture capital firms.
Thanks to the rapid spread of mobile devices, the user experience of various financial tasks has been provided. Thus, consumers have been smoothly integrating with financial institutions through fintech services.
More than 90% of consumers make financial payments using mobile devices. Forecasts say that in a year, the share of mobile transfers will increase by 120%, 80% of all bank transfers.
It is estimated that during the year, user financial spending in the app store will increase by 90% ($157 billion), and 76% of US users aged 27 to 42 will use e-banking.
It is worth noting that the use of cash over the past few years has decreased by 40%.
On top of that, there are some pretty staggering statistics. Although it refers to 2019, we surely can conclude that today the picture has not changed much. Among fintech companies that have released mobile applications for their banking products, only about 40% have passed more or less full-fledged professional testing of applications. Not surprisingly, after a year or two, half of these applications die. The success of your fintech product depends not only on high-quality marketing or public presentation, but also on the ability to resist DDoS attacks, server overload, influx of users, protection from hacks, etc. Experienced software testing specialists are called upon to eliminate all possible problems of this kind.
Most of the needs of users are satisfied solely by the use of innovative technologies. Few consumers and organizations will choose to partner with a financial institution that does not have a website or financial services software. But such organizations still function.
The right approach is when a financial institution puts customers' needs first, thus guaranteeing cooperation.
64% of the management team of insurance organizations are confident that the Internet of Things will be the primary tool for developing their companies. E-commerce (the main engine of fintech) has an average annual rate of 10-14%. This growth is driven by consumer activity.
About 66% of users worldwide have already used one or more fintech platforms. But in 2018, this figure was 34%. Consequently, in a few years, the use of financial technologies has doubled.
Already 65% of consumers plan to carry out financial transactions with organizations representing a unified platform (for example, social networks or banking mobile applications). 94% of users worldwide are aware of the existence of one or more fintech services.
Open banking is changing how financial services connect with each other. Banks now allow secure data sharing through application programming interfaces, often called APIs. These connections let fintech platforms link directly with bank accounts and financial data. Thousands of apps use APIs to access payment data, verify accounts, and move money between services.
API driven finance is growing quickly. Many banks now provide developer portals where companies can build tools on top of banking infrastructure. Payment services, budgeting apps, and lending platforms often rely on these integrations.
Banking as a Service platforms are also gaining attention. These systems allow companies to offer financial products without becoming full banks themselves. As a result, financial services now appear inside many digital products that were not originally built for finance.
The blockchain system is a distributed ledger that allows you to store information worldwide on multiple servers. It is a technique that allows two parties to pay using virtual currency. Blockchain technology has revolutionized banking systems and financial markets.
More than 25% of users are aware of this technology. By 2027 the blockchain quota will be $25 billion because it is the most developing financial technology sector.
Р2Р (peer-to-peer transfers) in 2019 was estimated at $43.16 billion, and by 2027 this amount will increase to $569 billion with an average annual increase of 27.6%.
Artificial intelligence (a type of fintech) is the intelligence that software demonstrates. It can be simple automation or complex machine learning. In the financial sector, AI performs many functions for which you would need to pay an employee of a financial institution.
From 2019 to 2025, the number of excellent banking chatbot interactions will increase by 3150%. Robo advisors are expected to manage $2 trillion in assets this year.
In 10 years, artificial intelligence is expected to perform approximately 95% of consumer interactions, and many users will prefer this interaction. It is worth noting that by 2035, thanks to artificial intelligence, work productivity will increase by 40%, and the financial sector's profitability will increase by 40%.
Financial technologies have transformed the market – already, 80% of financial institutions will develop their business using fintech. It is due to the fear of being uncompetitive in innovative technologies. 85% of financial institutions are confident that a share of their business will be given to autonomous fintech companies.
Consequently, by inertia, fintech is rapidly integrating into the financial sector, transforming it for more efficient and faster use.
