LONDON, Sept. 26, 2019 /PRNewswire/ -- The Fintech (Financial Technologies) market consists of sales of technology and platforms and related services. Companies in this market produce applications, processes and products, which are used in the financial services industry, and these solutions are provided as an end-to-end process over the Internet. It is used by financial institutions on the back end to automate insurance, trading, banking services, and risk management.
The global fintech market was valued at about $127.66 billion in 2018, and is expected to grow to $309.98 billion at an annual growth rate of 24.8% through 2022. Growth in the digital payments sector is driving the market for global Financial Technology (Fintech). Fintech has made payments for goods and services faster, easier, more convenient, and cost-efficient for customers. Customers can now pay for various goods and services via cryptocurrency, loyalty points, and other digital cash alternatives. The growth in the digital commerce market and proliferation of mobile technology has contributed to the growth of the digital payments sector. For instance, companies such as Square and Stripe provide portable Point-of-Sale (POS) systems which can instantly read and process touchless payments like Apple Pay, along with credit cards, and even some mainstream cryptocurrency wallets. In 2018, PayPal, a fintech payments company, increased its account base by 17% over 2017, reaching 267 million active accounts, with a record 13.8 million added in the fourth quarter alone. As an increasing number of businesses are adopting digital payment systems, the demand for fintech solutions is increasing and driving the growth of the market.
Companies in the global fintech (Financial Technologies) market are increasingly using block chain technology for better security and operational efficiency. Block chain is a technology which involves the implementation of a distributed database that is accessible to all the users over a network, where each user can add a new data record (block), with a timestamp that cannot be altered. The block chain technology maintains the authentication of data by restricting changes in the older data blocks while allowing the users to continue adding new data blocks, thus providing high security and transparency to companies operating in the Fintech market. It enhances trade accuracy, speeds up the settlement process, and reduces risks. As per the Pricewaterhousecoopers (PwC) Fintech report, by 2020, 77% of financial organizations plan to integrate block chain into their operations & 90% of payment companies plan to use block chain by 2020.
Consumer Data Security Concerns Might Hinder The Fintech Market Growth: Concerns regarding security of consumer data is restraining the growth of the Financial Technology (FinTech) market. Fintech companies collect a large quantum of data about their customers, which includes personal information and other financial records. Many fintech companies also collect data on a customer's online spending behavior and social media patterns, to trace their digital footprint. This data collected is used for analysis in domains like marketing, sales, and financial decision-making, such as generating credit score to determine a customer's risk profile. This means a large amount of personal and sensitive data is potentially vulnerable to breaches and can be accessed by malicious entities. Some of the major security issues for companies operating in the fintech market include data loss, data breaches, malware injection, hacking of accounts and abuse of cloud services. For instance, in 2017, hackers breached one of the top fintech companies, Equifax Inc.'s software platform and accessed sensitive personal information of 143 million+ Equifax customers in the United States and Canada. Such instances are resulting in distrust in customers regarding secure handling of private information, thus restraining the growth of the fintech market.
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