Global Fintech Market (2018 – 2023)

APRIL 20192019

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Key Questions Answered in this Report

What is Covered? What you get – Impact

 What is the historical, current, and forecasted market size data  Understand the demand for fintech for specific applications, in
for the global fintech market for the segments based on services order to determine the viability of the business.
and technology?
 Identify the developed and emerging markets where fintech is
 What is the historical, current and forecasted regional (North consumed.
America, Europe, Asia-Pacific, Latin America, and the Middle East
 Determine optimal product positioning, and identify suitable
and Africa) market size data for the global fintech market?
distribution channels.
 What are the regulations and initiatives in the fintech market in
 Identify the gap areas and address them.
the different segments?
 Develop strategies based on industry standards and economic
 What are the major drivers and challenges impacting the fintech
factors for the segments.
market?
 Define competitive positioning by comparing the products and
 What are the market trends and significant technological
services with other key players in the market.
developments in the market?
 What is the competitive landscape, along with the profiles of the
major public and private players operating in the market?

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Market Definition
Payment/billing generates the highest revenue in the
fintech market, followed by mortgage/real estate, money
transfer/remittance, regtech, and insurtech. ‘Others’
include lending, public finance, capital market, wealth
management, and others.
Based on Services
 Payments/Transactions: This refers to enterprises whose business
models involve the use of technology to offer services, and/or
whose core businesses are based on the distributed ledger
(Blockchain) technology or the usage of cryptocurrency (e.g.
Bitcoin) for payments.
 Personal finance: This refers to companies that offer technology-
driven services to enhance retail customers' finances by assisting
them to monitor savings, credit scores, spending, or tax liabilities.
Fintech is used to offer retail banking services such as checking
savings account balance outside the traditional brick and mortar
bank branch.
 Insurtech: This refers to companies employing technology to boost
promptness, competence, accuracy, and convenience of processes
across the insurance value chain. This includes insurance
telematics, quote comparison websites, insurance domestics
(home automation), corporate platforms, claims software, online
brokers, cyber insurance, peer-to-peer insurance, underwriting
software, and digital sales enabling.
| GLOBAL FINTECH MARKET
 Regtech: This refers to companies that offer technology-driven
solutions to expedite and streamline compliance with reporting
and regulations, as well as safeguards enterprises from employee
and customer fraudulent cases.
Based on Technology
 Blockchain/Cryptocurrency: Cryptocurrency is a virtual medium
of exchange, created and kept electronically in Blockchain,
distinct from other currencies. Cryptographic technology is used
to decentralize the securely verified transactions and creation of
monetary units.
 Robotic process automation (RPA): RPA enables banks and other
financial institutions to control data, process transactions, trigger
responses, and communicate with other systems.
 Artificial Intelligence (AI): AI uses data science and machine
learning to develop personalized products for consumers.
 Data analytics: Predictive analytics can help fintech companies
provide customers with an individualized experience.
3
Executive Summary
GLOBAL FINTECH MARKET

Overview Trends
Global Fintech Revenue (in USD Bn)  The global fintech market is expected to expand at a CAGR of xx  AI and Blockchain are expected to be priorities for fintech
% during the 2018-2023 period, and reach a value of USD xx Bn investors, followed by insurtech and regtech, during the forecast
by 2023. period (2018-2023).
 Investments in the regtech and insurtech markets are expected  Factors such as rise in competition among new entrants, and
350 to surge massively in the coming six months, in addition to growing global consensus on reducing remittance transaction
306 substantial funding for facilitating technologies like Blockchain, fees are driving the penetration of digital channels.
300
: xx% AI, and RPA.
 Fintech companies in the remittance market segment have been
GR
250 CA experiencing remarkable progress since the past few years. Due
to growing awareness about money transfer, remittance through
200 fintech solutions has increased.

150
113
Drivers Challenges
100
55  The boom in the e-commerce sector has driven the use of online  Uncertain regulatory principles and frameworks, and lack of
50 payments and e-wallets, all over the world. diverse Blockchain applications and use cases are expected to
delay the growth of the market during the forecast period.
-  Increasing demand for cryptocurrency has decreased the cost of
2015 2018 2023 transactions, and initial coin offerings (ICO), which is driving the  Fintech firms are failing to keep up with the traditional financial
fintech market. companies because of the lack of ‘human touch’. Their
MS
functional models often leave clients feeling like they are dealing
 Due to the rising need to eliminate fraud and crime in the
with some faceless entity.
financial sector, dependency on outdated software and
paperwork has decreased, and the adoption of fintech-based
solutions by the financial companies has increased.
Source: Netscribes Analysis

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Market Drivers and Challenges
The infiltration of mobile devices and technology-based solutions across regions is propelling growth of the global fintech market. However, regulatory and compliance
challenges continue to hinder its growth.
Key Drivers
 Significant use of mobile devices and technology-based solutions are increasing the demand for
financial and banking solutions, which can be accessed through personal devices. Banks and firms are
investing heavily in technology-based solutions.
 The cost of compliance has increased for global institutions, since they now need to comply with
regulatory norms across jurisdictions. The mounting cost of compliance has compelled many
corporates to invest in regtech companies. The advent of financial regulations including Payment
Services Directive 2 (PSD2), General Data Protection Regulation (GDPR), and Markets in Financial
Instruments Directive II/Markets in Financial Instruments Regulation (MiFID II/MIFIR) have
accelerated the investment in the last six months.
 The boom in the e-commerce sector has propelled the use of online payment methods and e-wallets,
across the world. Enterprises, as well as individuals are trusting fintech companies with their data to
transfer funds, make purchases online through e-commerce websites, and use e-wallets.
| GLOBAL FINTECH MARKET
Challenges
 One of the significant disruptions for the United Kingdom (UK) fintech is the introduction of GDPR.
Financial firms, both old and new, have to invest substantial time and resources to certify that they
comply with the new laws.
 Fending off cyber-attacks is one of the paramount challenges faced by firms and governments, all
over the world. Given the complex nature of the client data that companies store, this is a severe
concern for fintech firms. Cybercriminals are hurling more frequent and sophisticated attacks. It is
quite evident, owing to the fact that the number of data breaches had amplified in 2018.
 Fintech firms are lagging behind when compared to traditional financial companies. They lack in
‘human touch’. Their functional models often leave clients feeling like they are dealing with a faceless
entity.
5
Global Fintech Ecosystem – Players and Clientele

Fintech Ecosystem Fintech clientele

Individuals
Players in the Fintech Ecosystem
 Individual demand for fintech services is driven by rapid
Consumers Regulators Educational urbanization, mobile and Internet penetration, and ease of use.
Financial Institutions Start-ups Investors
Institutions In established regions with high banking penetration, tech-savvy
Fintech companies* consumers are demand for a wide range of services, and better
Robo-advisors and Payments and experience. In emerging markets, fintech firms are helping in
RegTech Digital Banking
Personal Finance Remittances enabling financial inclusion.
Corporations and Small and Medium-sized Enterprises
(SMEs)
 Limited financial history and other challenges leave SMEs
underserved when it comes to acquiring financial benefits from
traditional institutes. This unmet demand presents an
opportunity for fintech companies. The digitalization of the
Digital Identity Blockchain/DLT and lending process, including the assessment of credit risk, is
Alternative Finance Insurtechs providing SMEs with an alternative way of funding.
Verification Bitcoin
Financial Institutes
 Across regions, banks are collaborating and investing in fintech
companies to drive efficiency, offer new products, and improve
customer experience. The aim is to incorporate fintech solutions
across the value chain.
Governments and Regulators
 Regulators are also collaborating with fintech firms and
leveraging their capabilities to improve their processes.
Note: The start-ups and segments covered in the Fintech Ecosystem are not exhaustive but indicative only.

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Global Fintech Market – Regulations and Government Initiatives
Given the potential and opportunities associated with
the fintech industry, regulators and policymakers across
the world are focusing on developing more functional
fintech ecosystems through a range of policies and
other interventions. Emerging economies are also
encouraging investments in this industry, and trying to
bring in frameworks that ensure a fintech-friendly
environment.
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Initiatives undertaken by governments to encourage fintech companies
 To remain competitive and offer an environment that sanctions new initiatives, globally, firms are looking into enterprises with regards to
open banking, which allow fintech firms to leverage on banks’ data to provide and extend their offerings to bank customers.
 Regulators are undertaking various approaches to provide regulatory oversight with the aim to protect consumers, and at the same time
make the effort not to deter innovation.
– Various countries have adopted sandboxes to provide fintech firms with an environment to evolve and innovate. These fintech
companies are able to launch products and services without the necessary licenses, which also allow regulators to have constant
consultations with companies to gain a better understanding of the sector
– Some countries have created special economic zones to set up firms focused on innovation. Specific zones may be subjected to various
regulations including lower taxes, permission to operate without necessary licenses (or with special licenses), etc.
– Regulators have been running consultations with industry players to understand the current industry scenario, and try to identify the
necessary steps that need to be undertaken to protect the consumers while encouraging innovation
– Regulators of certain economies have successfully implemented guiding principles to enable fintech growth
– Countries have also rolled-out fintech related laws or licenses, allowing these firms to operate in the region without the requirement of
a banking license
 Given the complexity of the fintech ecosystem and the existence of different guidelines across different countries, fintech industry
associations and financial regulators are collaborating, globally, with the aim to share leading practices, experiences, and frameworks,
thereby enabling the growth of fintech firms in different markets.
 To improve collaboration among regulators, the Global Financial Innovation Network (GFIN) was launched in August 2018 by 12 financial
regulators. The network assisted innovative companies to interact efficiently with the regulators and originate new ideas. They would also
create a new framework for cooperation among the financial services regulators on innovative topics.
7
Market Overview
The North American fintech market has been experiencing considerable growth lately, and is expected to expand at a CAGR of xx% during the
2018-2023 period to reach a value of USD 80.8 Bn by 2023. This region is going to continue attracting investors, owing to top notch technology
infrastructure and organized regulatory sandbox.
North America Fintech Market Revenue North America Fintech Market:
(USD Bn), 2015-2023F USD xx Bn (2018) Market Trends
 In general a mature market, North America currently accounts
2023 80.8 for xx% of the global fintech market share. This region has
been witnessing continued growth driven by investments,
2022 91.6 0.30% particularly in 2018, with the US recording a 5-year high on
CAGR (2018-2023): xx%

7.89%
the back of 25 mega-rounds worth USD xx Bn.
2021 87.3
 This region is also home to the maximum fintech start-ups
2020 76.4 22.02% with unicorn status. This region also witnessed fintech
companies diversifying their current services. Banking-as-a-
2019 63.6 45.58%
service (BaaS) platforms are facilitating fintech companies in
the US to increase the number of bank accounts. Such
2018 51.3 diversification is expected to propel growth in the region.
2017 40.5  Given the opportunities, North America is anticipated to
continue attracting investors. However, the recent investment
2016 31.4 24.21% trend indicates that investors are finding other regions more
lucrative, and hence, North America is no longer powering the
2015 24.1
global fintech funding growth. This can lead to a slowdown of
the overall fintech market growth in the region during the
The North America fintech market is expected to expand at a forecast period (2018-2023).
CAGR of xx% during the 2018-2023 period to reach a value of North America Europe APAC LATAM MEA
USD 80.8 Bn by 2023.

Source: Netscribes Analysis Source: Netscribes Analysis

| GLOBAL FINTECH MARKET 8

Company Overview

Overview Key Investors Overview Key Investors

Description -Robinhood is
headquartered in California, USA. Baiju
Bhatt and Vlad Tenev founded the
company in 2013. It is a stock brokerage
company that offers mobile app
services. It allows users to invest in
publicly traded companies, ETFs listed
on the US stock exchange, and
cryptocurrencies, without paying any
commission.
 Founded in - 2013
 Headquarters - California, USA
 Number of employees – 501-1000
 Website- www.robinhood.com
 Industry – Finance and Insurance
Key People
Vladimir Tenev
Co-founder
Baiju Bhatt
Co-founder
 Sequoia Capital Description - Ant Financial is headquartered
 Kleiner Perkins in Hangzhou, China. The company was
previously known as Alipay (part of Alibaba
 ICONIQ Capital Group), but was rebranded as Ant Financial
 DST Global Services in 2014. Among the fintech
Products/Services companies all over the world, Ant Financial
 Investing: The mobile-based app helps users invest in stocks, ETFs, is one of the most valuable unicorn
options, and cryptocurrency without the need of a manual. companies with a valuation of USD 150 Bn.
 Founded in - 2014
 Strategize and Execute: Robinhood provides multi-leg options
strategies for advanced traders. It analyzes candlestick charts, and
 Headquarters - China
trades on margin to enhance buying power.
 Number of employees – 5001-10000
 Cash Management: It is yet to be launched by the company.
 Website - requirements of small businesses, and individuals. The cloud and
www.antfinancial.com
 Industry - Personal finance,
Software
Key Initiatives Key People
 At the beginning of 2018, the CEO of Robinhood announced that the
company is on its way to create initial public offering (IPO).
 Free trading option, and free cryptocurrency trading are vital factors
that have contributed to the company’s growth, and helped it become
Eric Jing
a millennial-friendly brokerage firm. In 2017, its customer base
accounted for 4 Mn. Chairman and CEO
Simon Hu
President
 China Investment Corporation
 China Construction Bank
 China Development Industrial Bank
Products/Services
 Ant Financial offers an extensive range of financial services to
individuals, as well as small and micro businesses, using
technology such as Blockchain, AI, big data, cloud computing, and
the Internet of Things (IoT).
 It has developed online platforms to deliver a wide array of
products and solutions, covering payments, third-party insurance,
loans, and wealth management that emphasize the financial
big data analytics direct their credit, security, and risk control
processes, allowing them to offer tailor-made products.
Key Initiatives
2015: Koubei was created as a result of a joint venture between
Alibaba and Ant Financial. Ant Financial also launched Ant Fortune,
which offers hundreds of products from about 80 Chinese fund
institutions.
2017: Ant Financial introduced its facial recognition payment
technology through its Alipay services. Fortune Account service
platform was also launched. It allowed financial institutions to issue
content and trade their own financial products through the
platform.

Li Cheng
CTO, and International
Business Group’s COO

| GLOBAL FINTECH MARKET 9

Appendix
Research Methodology
Problem identification
The analyst identifies key questions
that he/she would like to address
from the market study.
He/she describes the major
challenges that would help clients
understanding the industry, globally,
or for a specific region.
| GLOBAL FINTECH MARKET
Defining objectives
The analyst then defines the
research objectives
methodologies which form the basis
of the research.
Information gathering
The next stage of research is
and conducted utilizing secondary and
primary sources of information.
They conduct an in-depth study of
the global market, identifying and
understanding its key stakeholders,
drivers, trends, challenges, and
opportunities, covering major
regions such as North America, Latin
America, Europe, Asia-Pacific, and
the Middle East and Africa.
Primary research complements the
secondary research, as and when
required, as it helps gain insights
from the industries directly, by
communicating with senior
executives, key opinion leaders, and
independent consultants who are
experts in their industries, or
specific industry sectors.
Analysis Reporting
The qualitative and quantitative The analyst then creates a report
findings from the previous stages are with the support of his findings and
brought together by specialists to analysis, with help from an editorial
perform a rigorous analysis. The team.
regional market trends, drivers, and
opportunities obtained during the
analysis are compared with regional
economic indicators, sector growth
rates, population index, etc., to
ensure consistency of the data. After
consistency is ensured, these
historical and present indicators
help to understand how the market
will perform in the future. The
proprietary forecasting model
factors in all these indicators to
predict the future market accurately.
10
Appendix

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