FinTech Series | An Examination of the Industry

Part I — Introduction

Scope of the Series

This series of reports will provide an overview of the financial technology (FinTech) industry through analysis of the market’s size, forecasts for its various segments, and a look at the trends that are driving the different strategic approaches of organisational stakeholders. I will look at the dynamics of the UK market, the growth in Alternative Finance, the role of Big Teach and emerging technologies such as blockchain and the regulatory landscape.

The term FinTech shall be applied to both the description of this segment of the financial industry and in naming those firms operating within it as either FinTechs or FinTech companies. The denomination used in providing market data is the US dollars ($) as the market is mostly examined on the macro global level.

My Research Approach

Research has focused on the following activities and sources; secondary research, government reports, company reports, journals, trade publications, third-party surveys.

It should be borne in mind that, although care has been taken to only use information which is of a high calibre and from reliable and, ideally, independent sources, there is inevitably some bias in what is published and made public by individual organisations. Also, while all the information is recent (dating back no further than 2017) things can and do become outdated very quickly in this fast-moving sector.

High-Level View of FinTech

The fundamental building blocks of finance and financial services (FS); such as money, assets and markets have been changing. The drivers of these changes are numerous: ranging from the emerging technologies to changing societal, regulatory, industrial, commercial and economic demands.

FinTechs are defined by EY Global in their recent benchmarking report as:

‘…organizations that combine innovative business models and technology to enable, enhance and disrupt financial services.’

The market for technology enabled solutions in FS is substantial. According to the EY Global FinTech Index 2019 Global Consumer Survey:

96% of respondents are aware of at least one money transfer and payment FinTech service. While 75% use a money transfer and payments FinTech service.

FinTech is changing the financial services industry via infrastructure-based technology and open APIs. Operational advancements offered by robotic process automation, customer service chatbots, and DLT or blockchain are enabling greater agility, efficiency, and accuracy.

If properly regulated, FinTech can extend the benefits of financial inclusion to millions of people around the world who are currently unbanked or underbanked. Since 2014, 515 million more adults globally have gained access to the financial tools they need. As of 2018, 3.8 billion people (70 per cent of all adults) are now financially included worldwide.

Next in this series I will examine the dynamics of the FinTech Market including a deeper dive into the UK market — stay tuned.