Fintech Industry Growth Statistics [2024]: A Comprehensive Overview

To paraphrase Marc Andreessen’s famous quote, “Fintech is eating the world”. This copy from the a16z website beautifully summarises exactly why it’s such an exciting sector in 2024:

Fintech companies are innovating across broad categories—in banking, lending, insurance, real estate, and investing—both on the customer-facing side and in core infrastructure. We believe the combination of mobile, digital money, AI and machine learning, and new data sources offers startups a unique opportunity to leapfrog outdated infrastructure and compete with incumbent financial institutions to reimagine the way money moves.

https://a16z.com/fintech/

This article provides a comprehensive overview of the latest fintech growth statistics for 2024, categorised by market size, adoption rates, investment trends, key sectors, emerging trends, and other relevant categories.

Market Size and Growth

1. Global Market Size: The global fintech market was valued at $294.74 billion in 2023 and is projected to be worth $340.10 billion in 2024, reaching $1,152.06 billion by 2032, with a compound annual growth rate (CAGR) of 16.5% [2][3].
2. Revenue Growth: The fintech industry revenue has nearly doubled since 2017, growing from $90.5 billion to over $180 billion by 2024 [2].
3. Future Projections: By 2030, the fintech sector is expected to generate $1.5 trillion in annual revenue, representing nearly a quarter of global banking values [2][3].
4. Regional Growth: The Asia-Pacific region is set to dominate fintech growth, capturing 42% of the revenue increase, driven by emerging markets like China, India, and Southeast Asia [2][3].

Adoption Rates

1. Consumer Adoption: 76% of Americans use some form of fintech, including mobile banking apps, peer-to-peer payment platforms, cryptocurrency exchanges, or robo-advisors [2][3].
2. Global Recognition: Around 96% of global consumers recognize at least one fintech company or service [2][3].
3. Mobile Banking: Worldwide mobile banking users are expected to exceed 2 billion by 2026 [2][3].
4. Breaking Financial Taboos: 63% of Americans say fintech has made financial conversations with friends easier [2][3].

Investment Trends

1. Venture Capital Funding: In Q1 2023, fintech secured $14 billion in venture capital funding in the US, second only to enterprise software. However, this represents a 60% decline from the same period in 2022 [2][3].
2. Global Investment: Total fintech investment globally reached $113.7 billion in 2023, spread across 4,547 deals. While this marks the weakest result since 2017, it still represents significant investment in the sector [2][3].
3. Regional Investment: The Americas showed the most resilience in 2023, with fintech investment dropping from $95.4 billion in 2022 to $78.3 billion. The US alone attracted $73.5 billion, accounting for two-thirds of all fintech funding [2][3].
4. M&A Activity: Fintech mergers and acquisitions (M&A) totaled $98 billion in 2023, a significant drop from $349 billion in 2021[2][3].

Key Sectors

1. Digital Payments: The payments space continued to account for the largest share of fintech funding among subsectors, despite a drop from $57.9 billion in 2022 to $20.7 billion in 2023 [2][3].
2. Proptech and Insurtech: These were the only major fintech subsectors to see total investment rise year-over-year. Proptech investment increased from $4.1 billion to $13.4 billion, while insurtech grew from $5.9 billion to $8.1 billion[2][3].
3. AI in Fintech: Despite a drop in funding in 2023, AI remained a clear leader, attracting over $12.1 billion in fintech investment [2][3].
4. B2B and B2B2X Models: The focus is shifting towards B2B (targeting small businesses) and B2B2X (from B2B to any end-user) models. Small to medium businesses globally face a $5 trillion yearly credit gap, presenting significant opportunities for fintech solutions [2][3].
5. Neobanks: Neobanks, or digital-only banks, are expected to grow significantly, with the global neobank market projected to reach $722.6 billion by 2028, growing at a CAGR of 47.7% from 2021 to 2028 [1][2][3].
6. Blockchain and Cryptocurrencies: The global blockchain market size could grow to over $67 billion by 2026 [1][2][3].
7. Robo-Advisors: The robo-advisors market is expected to grow at an annual rate of 8.06% from 2024 to 2027, reaching $2,274 billion by 2027 [1][2][3].
8. Peer-to-Peer (P2P) Lending: The global P2P lending market could expand at over 30% yearly to reach $558 billion by 2027 [1][2][3].

Emerging Trends

1. Embedded Finance: The global embedded finance market is expected to grow annually by 35.5% between 2023 and 2028. Retail and e-commerce are set to be the biggest segments within the embedded finance market, driven by increased startup investments and greater smartphone penetration [1][2][3].
2. AI and Machine Learning: AI and ML are driving personalized customer experiences and enhancing fraud detection. Banks globally see nearly 5% of their yearly earnings affected by fraud, driving the adoption of AI and ML for enhanced security [1][2][3].
3. Sustainable Finance: There is a growing focus on ESG (Environmental, Social, and Governance) factors, with more fintech companies offering products that align with sustainable and ethical investing. Sustainable finance practices are becoming more mainstream as consumers prioritise environmentally conscious financial choices [1][2][3].
4. Regulatory Scrutiny: The fintech industry is entering a period of increased regulation, with scrutiny on relationships between BaaS providers and charter banks, private fund managers, and cryptocurrency-related products. Fintechs need to navigate evolving e-money regulations strategically, focusing on data privacy, cybersecurity, and financial services [1][2][3].

Additional Insights

1. Open Banking: Open banking API integrations are set to be game-changers in the fintech industry in 2024. The number of API calls for open banking is expected to grow by 645% globally in 2024[1][2][3].
2. Buy Now, Pay Later (BNPL): The BNPL market is projected to grow at a CAGR of 21.2% from 2021 to 2028, reaching $3.98 trillion by 2028[1][2][3].
3. RegTech: Regulatory technology (RegTech) is expected to grow significantly, with the market projected to reach $55.28 billion by 2025, growing at a CAGR of 20.3% from 2020 to 2025[1][2][3].

Conclusion

The fintech industry is poised for continued growth and innovation, driven by technological advancements and increasing consumer demand for digital financial services. Despite some challenges in investment and regulatory landscapes, the sector remains robust and continues to reshape the financial industry. By staying informed about these key statistics and trends, businesses and investors can better navigate the dynamic fintech landscape and capitalise on the opportunities it presents.

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Sources:

1. https://vanguard-x.com/fintech/unfolding-the-future-fintech-trends-2024/
2. https://dashdevs.com/blog/fintech-trends-2024/
3. https://www.techmagic.co/blog/fintech-trends/
4. https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/financial-services/ey-global-fintech-adoption-index-2019.pdf
5. https://www.cliffordchance.com/insights/thought_leadership/trends/2024/2024-fintech-trends.html

Citations:
[1] https://vanguard-x.com/fintech/unfolding-the-future-fintech-trends-2024/
[2] https://dashdevs.com/blog/fintech-trends-2024/
[3] https://www.techmagic.co/blog/fintech-trends/
[4] https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/financial-services/ey-global-fintech-adoption-index-2019.pdf
[5] https://www.cliffordchance.com/insights/thought_leadership/trends/2024/2024-fintech-trends.html
[6] https://mooreks.co.uk/insights/navigating-the-winds-of-change-the-uk-fintech-market-in-2024/
[7] https://plaid.com/the-fintech-effect-2021-mass-adoption/
[8] https://fintechmagazine.com/articles/bnpl-shopping-revolution
[9] https://plaid.com/resources/fintech/fintech-trends/
[10] https://hortoninternational.com/fintech-adoption-in-asia-pacific-an-upward-growth-trajectory/
[11] https://kpmg.com/xx/en/home/insights/2024/02/top-fintech-trends-in-h1-2024.html
[12] https://kpmg.com/xx/en/home/industries/financial-services/pulse-of-fintech.html
[13] https://explodingtopics.com/blog/fintech-trends
[14] https://www.harringtonstarr.com/resources/blog/top-contracting-fintech-trends-of-2024/
[15] https://www.lloydsbankinggroup.com/insights/fintech-trends-2024.html
[16] https://www.statista.com/statistics/1055356/fintech-adoption-rates-globally-selected-countries-by-category/
[17] https://www.statista.com/statistics/1055338/fintech-adoption-rates-europe-selected-countries/
[18] https://www.statista.com/outlook/dmo/fintech/worldwide
[19] https://www.linkedin.com/pulse/financial-technology-fintech-market-size-growth-caczf
[20] https://www.linkedin.com/pulse/fintech-market-size-growth-share-2024-future-yqk5e/?published=t