After years of success, now is a good time to recap how the fintech industry has evolved. Expectations for this decade remain high. There is also significant growth, more funding, and plenty of challenges to look forward.
The Fintech Industry in 2020: Finances
Many people often wonder if the fintech industry is still growing today. Despite an influx of players, the number of unicorns in the space remains fairly limited. Even so, there is plenty of room for current and future optimism.
Preliminary research by MarketScreener seems to indicate that things are looking good. They still forecast a growth to $26.5 trillion by 2022. That is significant, as 2022 may be the make-or-break year for financial technologies. Combined with a CAGR of up to 30% in the next few years, the path to growth is fairly clear.
In terms of investments, fintech companies continue to do well. Total industry-wide investments rose to $55.3 billion last year. Most of this money comes from China. It represents nearly half of the funding, primarily through Alibaba Group and Ant Financial.
Key Segments Remain the Same
There are several different segments to tap into as a fintech startup. E-commerce has always been a staple in this regard. In fact, it still drives most of the growth in the financial technology industry as a whole. The CAGR sits at roughly 10%, even in 2019 and early 2020.
In terms of “quick growth”, however, innovative technologies can’t be overlooked. Blockchain and regulatory technology are key contributors today. Blockchain is expected to maintain its 50% CAGR until 2024. As such, its total valuation will approach $20 billion by that time.
As impressive as those figures may look, regtech will dwarf blockchain by quite a margin. Reuters and Grand View Research claim regtech becomes a $120 billion industry this year. There will be key hurdles to overcome, however, but it remains a strong possibility.
Last but not least, there is peer-to-peer lending. Reports indicate how this segment will note a CAGR of over 25%. It is expected that this trend will continue throughout 2026. This is another strong segment of the fintech industry in 2020 and beyond.