For years now, global finance leaders have regarded fintech as the great disruptor, a digital force that threatened to bring unprecedented changes to the industry. Time has proved their fears justified, as the last decade has seen more progress in finance technology than the past hundred years.
Fintech firms represent some of the fastest-growing companies in the world, and established old banking institutions are being pushed to invest in the technology themselves. Huge global banks like Goldman Sachs, JP Morgan, and CitiGroup are now the biggest fintech investors on the planet. They seek to secure their future through innovations in crypto and blockchain technologies, along with future artificial intelligence and machine learning solutions. To better illustrate the true scale of the rising fintech industry, we researched the most incredible statistics and compiled them for you on the list below.
Fintech Statistics – 2019 (Editor’s Choice)
- Approximately 24% of people around the globe are already familiar with blockchain technology.
- Goldman Sachs estimates the worldwide fintech pie to be worth $4.7 trillion.
- There are more than 12,000 fintech startups worldwide.
- Chinese giant Ant Financial is the biggest fintech company in the world, worth over $60 billion and providing more than 10,000 fintech jobs.
- Some 46% of large fintech companies consider AI to be one of the most relevant emerging technologies for investment.
General Statistics About Fintech
- A recent research report concludes that 88% of legacy banking organizations fear losing revenue to financial technology companies in areas such as payments, money transfers, and personal loans.
The amount of business at risk continues to grow, and has already risen to an estimated 24% of revenues.
- Among traditional financial organizations, 82% say they plan to increase collaboration with fintech companies in the next three to five years.
This reaction is the banking industry’s response to the perceived fintech threat. Innovation is clearly the key aspect of survival for traditional financial companies, which means increased fintech investment from the banking sector.
- About 30% of consumers plan to increase their use of nontraditional financial services providers, but only 39% plan to continue using solely traditional service providers.
Fintech companies will continue to have more and more opportunities for attracting customers to their platforms, indicating increased growth rates in fintech payments in the coming years.
- The fintech market includes 39 VC-backed unicorns worth a combined $147.37 billion.
In great fintech news, the fourth quarter of 2018 saw five new unicorn births (Plaid, Brex, Monzo, DevotedHealth, and Toss) – plus two more in the first month of 2019 (N26 and Confluent). The cohort’s total valuation in 2018 was boosted by a record year for megarounds to existing unicorns, including Gusto and Robinhood.
- Partnering with fintech companies is up from 32% in 2016 to 45% this year on average.
Partnering with innovators will allow incumbents to outsource part of their R&D and bring solutions to the fintech market quickly. Fintech startups benefit from these partnerships as they develop new theories and models: In order to test and validate them, they need access to large data sets that incumbents already have.
- The global fintech market size in 2018 reached $111.8 billion.
This represents a staggering 120% increase compared to 2017, when the market was worth about $50 billion. The spike was mainly due to a few massive buyout deals like Vantiv’s $12.86 billion acquisition of WordPay, which made Vantiv one of the biggest fintech companies in the world.
- About 46% of today’s consumers use digital channels exclusively for their personal banking.
Improvements in online banking services mean that users no longer feel the need to visit physical locations. While 62% of surveyed consumers saw value in having local branches, respondents said their visit frequency dropped from “a few times a month” to “a few times a year.”
- According to a recent survey, 93% of organizations now use at least one cloud-based service.
To break it down, the top three most-used cloud services are web hosting (76%), email hosting (56%), and cloud storage and file-sharing (53%). While only 35% of organizations are using online backup and recovery, this type of cloud service is expected to see the most growth in the next 12 months – 23%.
- Half of banking customers globally are now using fintech firms
Fintech companies are primarily gaining momentum and mindshare amongst younger, tech-savvy, and affluent customers. Research also found that 46% of customers are using services from more than three fintech providers.
- While 60% of financial institutions now view fintechs as potential partners, nearly the same percentage (59.2%) are also actively developing their own in-house capabilities.
Executives at traditional financial firms believe their fintech counterparts provide a better experience in most areas of interaction, including convenience, ease of use and transparency, and value.
Mobile Payment Statistics
- By 2020, 90% of smartphone users will have made a mobile payment.
This statistic alone indicates that the fintech industry is poised to become one of the biggest and most successful tech branches in the next decade.
- The global mobile-payment market is on track to surpass $1 trillion in 2019.(Statista)
In just four years, worldwide mobile-payment revenues rose from $450 billion in 2015 to more than $1 trillion in 2019.
- Among smartphone users, 36% (938.2 million people) expect to use payment apps in 2019.
This represents a 13.5% year-over-year increase, and has great implications for fintech market size. Smartphone users are becoming increasingly comfortable scanning QR codes and using near field communication (NFC) technology to complete mobile transactions.
- By 2022, mobile transactions are projected to grow by 121%, eventually composing 88% of all banking transactions.
Consumer visits to retail bank branches are set to drop 36% in the same period, disrupting the industry even further, but it is worth noting that actual user interaction levels with banks will still increase.
- In the next two years nearly 3 billion users will access retail banking services via smartphones, tablets, PCs, and smartwatches, up 53% from 2017.
Fintech banking trends show that usage will continue to rise as consumers increasingly opt for banks offering the convenience of rapid, multi-channel digital services. This means that banks need to focus on providing a friction-free digital experience to customers if they are to remain market leaders.
- The combined market share of Apple Pay, Samsung Pay, and Google Pay in mobile payment will be 56% by 2021 in the U.S.
The user base of these three services will exceed 500 million in the same period, with Apple leading the way as the company with the highest market share of all. This trend provides more evidence that the future of financial services lies in mobile.
- More than 67 million people in the U.S. will use proximity mobile payment systems in 2019.
This is a 21.8% increase compared to 2018, when 55 million U.S. users made a purchase using these systems. The number is expected to rise to 75 million by 2022.
- U.S. in-store mobile payments will rise steadily at a 40% compound annual growth rate to hit $128 billion in 2021.
Mobile payments provide a high level of convenience for users and are expected to rise significantly in the next few years, making these solutions essential for top fintech companies.
- More than a third of Black Friday 2018’s online sales were completed on smartphones.
This represents a large uptick from 29.1% just one year earlier. Black Friday accounted for a record $2.1 billion in sales.
- Global use of mobile payments is forecast to increase to 28% in 2022, surpassing credit cards and cash.
The use of mobile payments is set to continue its inexorable rise and become the second most common payment method after debit cards, which spells great news for the fintech sector.
Fintech Blockchain Statistics
- Fully 77% of financial services incumbents responding to a recent survey expect to adopt blockchain as part of an in-production system or process by 2020.
The global financial system that currently operates on the basis of highly dependent manual networks is just one of the sectors that could benefit from blockchain implementation.
- Global revenue from enterprise blockchain applications is expected to rise from $2.5 billion to $19.9 billion by 2025.
Blockchain experts will soon become some of the most sought-after employees in the world of financial technology. There is already a lack of available talent in this area, and companies must make sure to train and build up their blockchain sectors to be prepared for future challenges.
- In 2017, blockchain firms saw record levels of VC investment and deal volume, achieving a record high of $512 million.
Investments in blockchain solutions from financial technology companies are soaring year over year. Projections suggest this trend will only accelerate.
- The financial services industry currently spends $1.7 billion each year on blockchain technology.
Study results from Greenwich show that blockchain budgets increased 67% last year, with one in 10 of the banks and other surveyed companies now reporting blockchain budgets in excess of $10 million.
- By 2026, the business value added by blockchain will grow to slightly over $360 billion, then surge to more than $3.1 trillion by 2030.
This statistic indicates that blockchain may reshape entire economies, and fintech businesses will be at the forefront of this revolution. In the future of finance, it will become increasingly imperative to commit to innovating and attracting industry experts if you want to survive.
- There were 35 million identity-verified crypto users in 2018, almost double the number in 2017.
(University of Cambridge)
Total user accounts at service providers now exceed 139 million, but only 38% of all users can be considered active – though definitions of “active” vary significantly across service providers.
- Multi-coin support has nearly doubled from 47% of all service providers in 2017 to 84% in 2018.
(University of Cambridge)
This is one of the fintech industry trends driven by the emergence of common standards across multiple cryptocurrency platforms.
- VC investment into U.S.-based blockchain fintech projects in the first half of 2018 was far greater than all of 2017.
Fintech-industry analysts say the widespread applicability of blockchain to help harness efficiencies within financial institutions is a primary driving force behind investment and industry growth.
- On January 4, 2018, the number of Bitcoin transactions performed in one day reached 425,000.
Confirmed transactions have been on the rise since Bitcoin’s inception over a decade ago, making crypto markets a potential goldmine for companies in the fintech sector. There is still progress to be made: In 2016, credit card companies processed 39.2 million transactions on an average day.
- More than 200 banks and payment providers across the globe have implemented and tested Ripple’s technology with their own internal payment systems.
RippleNet is now used by some of the industry’s biggest financial institutions, including Santander, SEB, Western Union, and Moneygram. It is increasing apparent that blockchain technology will be part of the future of financial services.
Artificial Intelligence in Fintech Statistics
- Successful banking-related chatbot interactions will grow 3,150% between 2019 and 2023.
Customer-facing systems such as text chats, voice systems, or chatbots can deliver human-like customer service or expert advice at a low cost. Juniper Research estimates that 826 million working hours will be saved by chatbots in 2023 alone, making AI one of the top fintech trends.
- AI will power 95% of all customer interactions within five to 10 years, with consumers expected to eventually prefer interaction with machines over humans.(Servion)
In the next decade, businesses will implement advanced AI assistants designed to be proactive, to anticipate customer needs, and to engage on an emotional level. Ultimately, experts say, only five percent of customer interactions will require human involvement at all.
- Robo-advisors are expected to manage $2 trillion in assets by 2020.
The banking market is ripe for disruption, and fintech firms are set to take the lead in this change to cater to changing customer preferences. In 2015, robo-advisors managed less than $20 billion in assets in the U.S., but this number is set to increase rapidly. AI advisors look set to manage about 17% of total assets in the next six years with an annual growth rate of 120%.
- AI technologies are projected to increase labor productivity up to 40% by 2035.(Accenture)
AI statistics show that the technology could double annual economic growth rates by changing the nature of work and creating a new relationship between people and machines, enabling us to make more efficient use of our time.
- AI could increase profitability of industry by an average of 39% by 2035.
This projected increase in profitability will lead to a massive economic boost of $14T across 16 industries in 12 economies, which is amazing news for fintech stock.
Extended Reality Statistics
- The extended reality market amounted to $27 billion in 2018 and is expected to expand dramatically in the coming years, with forecasts for 2022 surpassing $209 billion.
The best fintech companies are considering implementing extended-reality technology. Some of those are already heavily investing in the development of solutions based on AR, VR, and mixed-reality models.
- At least 45% of tech-savvy consumers want their banks to present new ways of communicating, like wearables or virtual reality.
At the same time, 80% of respondents believe it’s important to be a pioneer in XR solutions. This means that banks and their financial technology partners will need to master the application of extended reality technologies in creating new, winning business models.
- By 2020, 100 million consumers will shop in AR both online and in retail stores.(Gartner)
The impact of augmented- and virtual-reality technology in retail can be transformative for the whole industry. With VR’s immersive interfaces, retailers can create task efficiencies or reduce the costs associated with designing new products. They can also enhance customer understanding through advanced graphical visualization and simulation technologies.
- By 2020, 46% of retailers plan to deploy either AR or VR solutions to meet customer-service requirements.
Customers are driving fintech companies and others to innovate when it comes to user experience, and extended-reality technologies may prove to be the best solution to engage the audience.
- Mobile augmented reality reaches more than 1 billion users worldwide.
Globally, AR will see an installed base of more than 2.5 billion devices and revenues of $70 billion to $75 billion by 2023. Most of these revenues will be in gaming and utility tools, but AR fintech solutions have great potential too.
As we move into the 2020s and beyond, financial technology solutions will become integrated into the fabric of modern life. The old world is quickly giving way to a digital age that is disrupting whole industries and moving them in completely new directions.
The fintech statistics on our site show that companies seeking to remain relevant must prioritize innovation or risk getting left behind. The main trends will continue to be mobile, artificial intelligence, blockchain, and extended-reality technologies.
Raj Vardhman is Head of Marketing & Tech at carsurance.net. He’s a self-made white hat SEO expert and WordPress virtuoso—passionate about developing new SEO strategies with nominal budgets on WordPress. Raj loves designing, traveling, photography, fabulous food, and even better conversation.