30+ Shocking FinTech Statistics: Banking’s Great Disruptor

Written by Judy WongUpdated: 28th Mar 2022
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Financial technology is the great disruptor.

Although it has been around a while, financial technology only became popular in the last five to ten years.

FinTech is the marriage of finance and technology. Using technology, companies create new and innovative financial solutions for customers and businesses. In 1918 Fedwire paved the way for the first technology-driven financial transaction when creating the electronic fund transfer (EFT) system.

This financial system using technology has been growing bigger and bigger ever since.

FinTech Statistics: What Everyone Should Know

#1. FinTech is One of the Fastest Growing Industries Worldwide. (Avg. annual growth >25%).

In 1990 less than 1% of American adults owned a mobile phone. By 2020, just three decades later, nearly 100% of adults own one. This adaption to technology has allowed the FinTech industry to explode.

#2. 88% of Financial Institutions Believe They Will Lose Revenue to FinTech Companies (Over next five years).

Why?

  • Efficient – FinTech companies can streamline and create greater efficiency in their processes with their online platform.
  • Focused– As companies, FinTechs usually provide a single product or service. Because these companies specialize in a specific product, they can focus on creating the most efficient and user-friendly customer experience.
  • Customer-Driven – People are seeking technology-driven, self-service options for everyday tasks. They no longer value one-to-one relationships in business transactions.

#3. Nearly Half of Consumers Not Using Payment Apps Cite Ease of Use of Traditional Payment Methods.

Besides ease of use, security was the second most common reason consumers stated for not using FinTech payment systems.

To convince consumers that the easy-to-use mobile payments systems have value, the companies need to invest further into security in their systems. People value their financial well-being. It must be protected and secure.

#4. Asian Companies Lead Globally in Financial Technology Industry.

The leading companies in Asia include:

  • Paytm – An e-commerce payment system based in India. It’s valued at $16 billion
  • Grab – Based in Singapore, this company offers ride-hailing, food delivery, and digital payments. At $14 billion, Grab has investors including SoftBank and Uber
  • GoJek – Another leader in the FinTech industry. Based in Indonesia, this ride-hailing and online payment company was recently valued at $12 billion.
  • Ant Group – Finally, the largest FinTech in the world is based in China (surprise, surprise). Their largest subsidiaries are Ali Pay (like PayPal) and Alibaba (the Amazon of China).

#5. Providing One Product or Service is the Unique Value Proposition (UVP) of FinTech.

Unlike traditional banks, most FinTech companies focus on one and only one product or service. This allows them to specialize in their product (payments, budgeting, loans, etc.) and provide the greatest efficiency, usually at a lower cost.

#6. FinTechs Serve the Needs of the Unbanked.

The FinTech industry can also capture the “unbanked” population (5% of the U.S. population). These individuals do not have a bank account. Unable to qualify under the traditional bank guidelines, the FinTech companies allow these people to use their services because they have fewer restrictions.

#7. Investment in FinTech has Expanded to Hubs Outside the US, UK, and China.

By nature, FinTech companies are innovators. As a result, FinTech hubs are germinating worldwide, creating new markets. Worldwide the number of FinTech companies grew to 1,463 in 2020.

#8. Global Venture Capital Invested $12.2 billion in FinTech Companies in H1 2020.

Companies realize that technology-driven innovation is critical to keep businesses thriving. As a result, interest in investing in and partnerships with FinTech companies has become increasingly popular.

#9. Of All Mobile Banking Customers, 13.7% Use Their App Several Times a Day.

Consumers value the ability to check their account balance as one of the most important features (85%). Statistics also indicate that over 30% of users want the ability to enable/disable their debit and credit card using the mobile app.

#10. FinTech has Lifted Millions of People Worldwide Out of Extreme Poverty.

It brings financial services to people unable to access them before. Those without a regular income or a permanent address use FinTech to build wealth and escape the cycle of poverty.

For example, M-Pesa, a FinTech app released in Kenya in 2007, transforms smartphones into bank accounts. It allows users to make payments, receive payments and make deposits securely online.

#11. PayPal Was the First Global FinTech.

Launched in 1988, PayPal, owned by Elon Musk, became the first worldwide FinTech company.

#12. It is a Huge User of Machine Learning and AI.

FinTech employs the most cutting-edge technologies. Using Artificial Intelligence (AI), FinTech most notably has robo-advisors. These algorithms automate investment advice, eliminating financial advisors’ needs and lowering costs.

Besides providing investment advice, AI provides cyber security by tracking payment history and flagging abnormal activity. Since the AI is automated, all this is done at a lower cost.

#13. 63% of People in the U.S. Have Never Heard the Term FinTech Before.

Believe it or not, many do not know what FinTech is (according to Ernst & Young survey). 21% said they had heard the word but didn’t know what it meant, and 16% knew it but could not give a definition.

#14. 79 Unicorns are FinTechs as of 2021.

These FinTech unicorns (private companies valued at least $1 billion) are worth over US$187 billion (as of H1 2019). This is a little more than 1% of the global financial industry.

#15. FinTech Companies Can Improve Spending Decisions.

One of the areas becoming increasingly popular in FinTech are personal finance apps. Personal Capital, Mint, Money Dashboard, and Credit Karma offer budgeting apps that help you spend less and achieve your savings goals. To add some fun to the mix, many apps provide gamification, which increases savings and reduces spending over time.

#16. Asia is the Biggest Consumer of FinTech.

China and India have the biggest FinTech usage. It is not simply the number of people, but the largest percentage of the population in Asia engages in FinTech. Both China and India boast more than 87% of the population as regular FinTech consumers.

#17. The U.S. is the Largest Producer of FinTech Companies.

Not surprisingly, Silicon Valley holds the top spot for the largest FinTech hub in the U.S. Surprisingly, Lithuania (4th) and Estonia (10th) are on the list in the top ten countries. After North America, Asia is the second-largest home for FinTechs. Leading the region, Singapore ranks third worldwide for the number of FinTech companies.

#18. FinTechs Known for the Relaxed Work Environment.

It is widely known that traditional banks with their three-piece suited employees have always been stuffy places to work. Unlike their counterparts, FinTech is known for its casual dress code and espresso bars, on-site happy hours, and company-sponsored gaming areas. Because of these company perks, FinTechs can entice top talent, especially in the younger generations.

#19. Brands that Pioneered the FinTech Industry Include:

#20. 25% of the FinTech Market is Held by Digital Payment

Have you ever bought on Amazon or paid a friend using Venmo, Apple Pay, or PayPal? If so, you are part of the population contributing to the growth of digital payment. It is fast and easy – so why not?

From $4.1 trillion in 2019 to $5.2 trillion in 2020, digital payments grew more than 25% in just one year.

#21. Over 90% of U.S Smartphone Users Will Make One or More Mobile Payment During 2022.

As online payments continue to gain widespread acceptance, more people are willing to use them. Payments using Zelle, the largest payment-processing app in the U.S., exceeded $133 billion in H1 2020.

#22. Nearly 88% of All Banking Transactions Will be Done Using a Mobile Device in 2022.

From checking a bank balance (the most widely used feature) to paying bills online, accessing banking on a mobile device is the way to go. Every day more and more users turn to their mobile devices to complete their banking transactions. The apps are convenient, available 24/7, and easy to use.

#23. 95% of All Customer Interactions in the Next Decade Will be AI-Powered.

Why? Customers prefer machine interactions over humans. The world has become a self-service society.

#24. FinTech is Revolutionizing the Loan Industry.

According to FinTech statistics, digital lending loan origination was $41.1 billion in 2017. By the end of 2022, the loan origination is projected to be $73.7 billion, increasing 79% in five years.

These included business loans, personal loans, and student loans. In 2022 nearly half of the FinTech created loans are personal loans.

#25. By 2023 Chatbots Will Save Banks $7.3 Billion

People want self-service options. Many would rather communicate with a computer than a human. Good news for banks. They saved $209 million in 2019 using AI. By 2023 chatbot technology will increase savings by over 3,400% in just four years.

#26. 75% of Traditional Financial Institutions Will Invest in Customer-Centric Business Model

In a 2020 global survey, bank executives admitted that being customer-focused in real-time was critical for the retention and acquisition of customers. Unfortunately, only 17% felt adequately prepared in the current omnichannel model.

#27. Integrating FinTech Startups into Traditional Companies is Hard.

Marrying FinTech and traditional companies is old (way of doing things) joining new (way of doing things). Management and culture are very different between the two.

The traditional companies see cyber security issues as the biggest challenge to merging together. On the other hand, FinTech employees (often millennials and Gen Z) cite fitting into the traditional culture as the greatest hurdle to overcome.

#28. The Insurance Industry Will Save Nearly $1.3 Billion by 2023 Using AI.

AI is taking over this role from post-accident data collection to analyzing photos of accident scenes. These AI functions reduce the time and money required for insurers to settle claims. Ultimately it creates a better user experience and a happier customer.

#29. In the Top 50 Largest FinTech Companies, 28% are in Lending.

Lending is the most profitable choice. Although wealth, payments, and insurance were also represented on the list, lending is fourteen of the top fifty companies.

#30. $50 Billion is Invested Annually in the Financial Technology Space

Blockchain startups raised $5.6 billion of FinTech startup funding in 2017. Founders looking to start a new digital bank required a minimum of $50 million.

#31. In 2020 Nearly Two-Thirds of Financial Transactions Were Made Online.

Statistics from the FinTech industry show that over 66% of financial transactions in 2020 were done over the internet. Over 161 million Americans bank online.

FinTech Adoption Statistics

As technology becomes more affordable, more people can employ a mobile device to access financial information anytime and anywhere.

  • By 2020, the global FinTech adoption rate rose to a whopping 64%.
  • 92% of the population in China uses FinTech for banking and payments regularly.
  • Top five countries (in order) for adopting FinTech: China, U.S., Mexico, South Africa, U.K.
  • The U.S. trails China in FinTech adoption, with only 52% of Americans regularly using it for banking and payments.
  • Money transfer and digital payments lead in adoption rates. (2019)
  • Adoption rates: Insurance (29%), budgeting and financial planning (34%), and investments (48%)

What Are 6 Categories of FinTech?

  • Crowdfunding – one example widely-known in the U.S. is GoFundMe.
  • Blockchain/CyptocurrencyCoinbase and Gemini are amount leaders in this category
  • Mobile payments – Many people use Apple Pay, Samsung Pay, or Alibaba for electronic payments. This mobile payment industry is worth about $1 Trillion.
  • InsurTech – Lemonade, Oscar Health allows accessing your car insurance, home insurance, or health insurance.
  • RoboAdvising/Stock TradingVanguard, TD Ameritrade, E-Trade allow advising on managing your portfolio and trading stock
  • Budgeting App – Mint allows saving and budgeting using this app without using traditional spreadsheets

How Much Is the FinTech Industry Worth?

Growing at an annual rate of nearly 25%, the FinTech industry is expected to hit $310 billion by 2022. About $50 million per year of investments are made into the FinTech market.

How Big is the FinTech Industry?

As of November 2021, there were 37,101 financial technology startups worldwide. Leading the way, the Americas had the largest number of FinTechs (10,755). By comparison, the number of FinTech startups in the EMEA (Europe, Middle East, and Africa) was 9,323, and in Asia, it was 6,268.

What Is the Largest Financial Technology Company?

Based on annual revenue generated by a financial technology company, San Francisco-based Stripe is the largest financial company in America, worth $35 billion. Its’ largest customers include Facebook and Amazon.

Unfortunately, Stripe does not come close to the largest FinTech company globally – Ant Financial in China. It was estimated to be worth over $131 billion in 2021 – over three times as big. This company is the parent company of Alibaba – the “Amazon” of China. It also owns Ali Pay (equivalent to PayPal). Ali Pay has over 1 billion customers.

What Are Examples of FinTech Companies?

  • Braintree – now PayPal Enterprise for business
  • Morningstar – stock and robo-advising
  • Acorns – saving app
  • Gravity Payments – credit card processing
  • Brex – business credit cards and cash management accounts for companies
  • Varo Money – A neobank
  • Blend – mortgage lending
  • TrueAccord – debt collection

Bottom Line: FinTech Statistics

FinTech as an industry is less than twenty years old. It is by far the fastest-growing industry worldwide. As technology becomes more affordable for people, FinTech can increase access to financial services, provide convenience for this ever-rushing world, decrease poverty, and make the financial world a fairer and more equitable place for everyone.

Keep Exploring Statistics:

Sources:

Judy Wong
Judy Wong

Judy Wong is a Writer and Researcher for SimpleMoneyLyfe with a love for mortgages, retirement savings, and personal finance. Judy’s added value is she is a house-flipper, landlord, and real estate investor. As a mom of four living in Charlotte, NC, Judy strives to create articles that can be used to teach financial literacy nationwide. She aims to craft easy-to-read, engaging articles about complex subjects.