FinTech industry expected to grow to USD 300 billion by 2023


FinTech is a massive wave that is sweeping through the world today. It is more like a tsunami. Smashing through and changing the finance industry in ways inconceivable just a few years ago. FinTech is an umbrella term for a number of technical innovations that aim to improve or simplify the areas of financial services. Financial services are going through intense innovation and disruption due to extensive use of technology like Application Program Interface (API), Artificial Intelligence (AI), Machine Learning (ML) and Blockchain to name a few.


The root of FinTech goes ways back to the 1860s where the technology of the telegraph was invented. However, from the mid of 19th century, there was an emerging trend for FinTech. From credit cards in the 1950s to ATM in the 1960s, from electronic stock trading in the 1970s to computer-based banking in 1980s, the FinTech has been widening its wings and scope. And with the rise and reach of the Internet, today FinTech has reached  new heights with its meaning being permeated with the emergence of Artificial Intelligence, Robo Advisory, Wealthtech, Insurtech, Peer-to-Peer (P2P) lending, crowdfunding, Regtech and so on.

The importance of FinTech can also be evident when we look at the data from the ‘google trend’ for the word ‘FinTech’. From the value of 3 (low popularity) at the start of 2014, it has reached 100 (peak popularity in search interest) in 2018 and has been around 90 since.

So where is FinTech standing in terms of its market and where it is expected to reach in the coming years? As per the recent report of ‘Global FinTech Market (2018-2023) by ‘Research and Markets’, the global finTech market is estimated to reach USD 305.7 billion by 2023, posting a Compound Annual Rate Growth(CAGR) of 22.2 percent over 2018-23.

Now the question arises, what the growth attributes to? As per the report, the high use of mobile and tech-based solutions is increasing the demand for financial and banking products. This has resulted in banks and other firms investing heavily for providing tech-based solutions, thereby giving competition to the existing FinTech firms. The same is evident from another report of KPMG titled ‘The pulse of FinTech 2018’, which illustrates that the FinTech investment in M&A, PE, and VC has more than doubled to USD 111.8 billion in 2018 from USD 50.8 billion in 2017. And all the three continents, America (USD 54.5 billion), Europe (USD 34.2 billion) and Asia (USD 22.7 billion) have witnessed significant growth in FinTech investment. Over recent years, FinTech has significantly affected the Indian financial services sector which is validated from the fact that the total investment in FinTech stood at USD 1.73 billion for the year 2018.

The largest contributor to the growth in FinTech will emerge from the service segment. This comprises of payment systems, Insurtech, Regtech and money management. The major growth will be contributed by the payment system which is expected to generate revenue worth USD 207.11 billion by 2023.

The next major segment is a technology which consists of Artificial Intelligence, Blockchain, Cryptography, biometrics, cybersecurity, robotic process automation. Among these is AI oriented FinTech the segment which is predicted to reach USD 26.92 billion by 2024 implying a CAGR of 31.5% during the forecasted period ( as per ‘AI in FinTech Market – Growth, Trends and Forecasts 2019-24, published by ‘ResearchandMarkets’).

The growth in the FinTech will also fuel huge employment opportunities across the globe. According to all recent surveys, the major demand for FinTech professionals will come from US, UK, Singapore, Australia, India and far & Middle East.

Thus, FinTech will continue to contribute to each country by igniting its economy and its growing awareness along with the availability of digital infrastructure which will only accelerate its rapid phase of development.

(Views expressed in this article are a personal opinion of  Seemita Bose Chowdhury, Assistant Professor, Department of FinTech & Financial Markets, ITM B-School, and Krupesh Thakkar, CFA, Head of the Department and Assistant Professor, Financial Markets, ITM B-School.)

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