They are not only focused on improving current products and services but also expanding operations into new markets. This means they are constantly striving to meet the increasingly diverse and high demands of customers worldwide.
So, what does the fintech industry look like in 2024?
Market Performance of Fintech
Fintech has experienced strong growth in recent years – but its usage is still not widespread globally. With the potential of fintech to expand financial access for consumers and small and medium-sized enterprises (SMEs), it is necessary to assess the industry’s demographics, market performance, growth drivers, and customer segments.
Market Growth of Fintech: This industry continues to grow, highlighting sustained interest in fintech services. While fintech was already growing prior to 2020, the pandemic has further fueled its growth. From 2020 to 2022, the industry achieved a growth rate of 50%, witnessing solid growth in the digital banking, digital fundraising, lending, and payment sectors.
Customer Attraction: In terms of customer attraction mechanisms, fintech companies rely on a diverse combination of channels and tools. This includes social media (70%), referrals (68%), websites (65%), and partnerships with local financial organizations (46%). Only a quarter or less acquire customers through traditional advertising, assets in the field, or in-person agents, indicating a shift away from conventional mediums. However, these mediums vary depending on regions, verticals, and developing economic preferences. For example, fintech companies in SSA and MENA tend to favor local advertising agents.
Challenges in Scaling Service for New Customers: While fintech is still experiencing strong growth, it has slowed down by 2022. Fintech also faces challenges in scaling services to new or underserved customer segments. The challenges mentioned include customer support (51%), high market competition (43%), high compliance requirements (34%), and pricing (32%).
Fintech industry continues to demonstrate resilient recovery and growth, but long-term uncertainties remain.
Factors Supporting and Hindering Growth: When it comes to factors hindering fintech growth, 56% cite macroeconomic factors. Other challenges include unfavorable legal environments (47%) and inadequate funding environments (40%). Meanwhile, fintech also reports a number of supportive factors such as consumer demand (51%), skilled workforce (39%), and favorable legal environments (38%).
