The report from Industry Research states that Fintech is beginning to transform the US financial sector, including the way that individuals and companies lend money, make investments, opt for loans, finance startups, and buy insurance. The report reveals that “on average, one out of three digitally active consumers uses two or more financial technology services.”
The report notes:
“As of 2018, the US accounts for 57% of the Fintech market. Consumers in the country have identified the key benefits that they can avail with Fintech innovation, such as convenience, security, simplicity, transparency, and personalization.”
“The large increase in online digital-only banks and mobile phone payments has led to increased adoption of Fintech money transfers and payment services. Digital payment is the leading market segment, with a total transaction value of [over] $880 billion in 2018.”
The report also mentioned that the total transaction value (for digital payments) could slow down to an annual growth rate (CAGR 2019-2024) of 8.6% by 2024. The Fintech market’s largest segment is digital or e-commerce with a total transaction value of over $820 billion in 2018, the report noted.
It also revealed that the total transaction value in the personal finance segment reached $440 billion in 2018. The total transaction value of personal finance is expected to reach an annual growth rate (CAGR 2019-2024) of 23.1% by 2024. The personal finance market’s biggest segment is Robo-Advisors with a total transaction value of $425 billion in 2018.
While certain segments of the Fintech sector are expected to grow steadily, it may take the lending sector a lot longer to recover due to the COVID-19 outbreak and resulting socio-economic challenges.
As covered in October 2020, financial services professionals have noted that the lending sector may take a year or longer to recover to pre-cOVID levels (according to a recent survey).
Another report from KPMG noted that digital commerce and Fintech platforms with experience-centric models will enable “long-term value creation.”