Fintech has increased adoption in all industries over the past few years. It contributed to the effective development of many organizations, gradually increasing productivity and financial profit. Organizations that did not use or apply financial technologies much later became uncompetitive.
Financial technology industry
Fintech initially requires significant investments, but statistics show that the payback of their use is worth it, optimizing the company’s financial sector. The advent of innovative technologies (artificial intelligence, blockchain technology) has allowed many organizations to engage in activities in other ways that increase efficiency and productivity.
The spread of financial technologies concerns various areas of activity:
- banking activities;
- registration of insurance;
- digital processing of payments;
- opening of credit lines;
- management of own finances;
- organization’s capital management;
- long-term investment.
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.
General Statistics
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 2019 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.
Consumer statistics
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.
63% 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 10-12%. This growth is driven by consumer activity.
About 65% of users worldwide have already used one or more fintech platforms. But in 2017, this figure was 33%. Consequently, in a few years, the use of financial technologies has doubled.
Already 60% of consumers plan to carry out financial transactions with organizations representing a unified platform (for example, social networks or banking mobile applications). 96% of users worldwide are aware of the existence of one or more fintech services.
Fintech mobility
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 121%, 88% of all bank transfers.
It is estimated that during the year, user financial spending in the app store will increase by 92% ($157 billion), and 78% 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 42%.
On top of that, there are some pretty staggering statistics. Although it refers to 2018, 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, and you can find more information or see such successful testing cases at the link – https://testfort.com/fintech-and-banking.
Blockchain technology
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 2024 the blockchain quota will be $20 billion because it is the most developing financial technology sector.
Р2Р (peer-to-peer transfers) in 2018 was estimated at $43.16 billion, and by 2026 this amount will increase to $567 billion with an average annual increase of 26.6%.
Artificial intelligence
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 2023, 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 39%.
What’s next?
Financial technologies have transformed the market – already, 82% of financial institutions will develop their business using fintech. It is due to the fear of being uncompetitive in innovative technologies. 88% 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.
