Fintech will be a $1.5 trillion industry by 2023

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Fintech revenues are projected to grow sixfold from $245 billion to $1.5 trillion by 2030.

Thats is according to a report from Boston Consulting Group (BCG) and QED Investors.

The fintech sector, which currently holds a two per cent share of the $12.5 trillion in global financial services revenue, is estimated to grow up to seven per cent. Last year, 2022 proved a challenging year for fintech companies, which on average lost more than half of their market value. However, the new research showed this was a short-term correction in an otherwise long-term positive trajectory.

The UK and European Union combined represent the world’s third-largest financial institution market and are expected to see substantial fintech growth through 2030, estimated at more than fivefold over 2021 and led by the payments sector.

The report revealed that Asia-Pacific is set to outpace the US and become the world’s top fintech market by 2030, with a projected compound annual growth rate (CAGR) of 27%. This growth will be driven primarily by emerging economies such as China, India, and Indonesia that have the largest fintechs, voluminous underbanked populations, a high number of small and medium-sized enterprises, and a rising tech-savvy youth and middle class.

North America, which currently has the world’s largest financial-services industry, will remain a critical fintech market and innovation hub, projected to grow fourfold to $520 billion in 2030, with the US accounting for a projected 32% of global fintech revenue growth.

Commenting on the findings, Laimonas Noreika, co-founder and CEO, of fintech companyHeavyFinance said: “The fintech industry is playing a crucial role in driving global economic growth, creating jobs and powering businesses. These projections show exponential growth in the coming years, and yet so many key sectors have yet to fully benefit from the power of fintech.

“As our industry moves forward, we need a much wider conversation about the importance of protecting the environment, offering companies the opportunity to access sustainable climate investments, and driving cleaner, greener businesses by reducing CO2 emissions,” added Noreika.

The report suggested that the payments sector will grow fivefold to $520 billion, driven by cross-border payments, “payment-plus” models (bill pay and payment apps offering adjacent services such as wallet services), and the proliferation of use cases driven by real-time payments.

Deepak Goyal, BCG MD and senior partner and co-author of the report said: “The fintech journey is still in its early stages and will continue to revolutionize the financial services industry as we know it.

“Customer experience remains poor. More than half the world’s population remains unbanked or underbanked, and technology continues to unlock new use cases in leaps and bounds. All stakeholders must therefore seize the moment. Regulators need to be proactive and lead from the front. Incumbents should partner with fintechs to accelerate their own digital journeys.”

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Fintech will be a $1.5 trillion industry by 2023

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