A KPMG report states that payments will retain their position as the most significant area for FinTech investment in the coming years. Other sectors on the rise: regtech, cybersecurity, insurtech, wealthtech and proptech.
Globally, the FinTech market is expected to be hot heading into the remainder of 2019, states the KPMG report. Payments is expected to continue as the hottest area of investment, while regtech, cybersecurity, insurtech, wealthtech, and proptech are all well positioned for growth – in addition to B2B platform services. Consolidation in payments and other mature areas of FinTech will likely speed up as winners continue to solidify their market share. Global expansion of FinTechs and global investments are also expected to continue for the foreseeable future.
$4 trillion spent on technology annually
Worldwide spending on information technology is expected to reach $4 trillion this year, according to Gartner, with the fastest growth rates in enterprise software, IT services and data-center spending. Moreover, Gartner forecasts $125 billion on cybersecurity spending alone in 2019. But its not just big business investments that are seeing huge sums of money, the FinTech ecosystem globally now itself attracts a huge amount of capital each year. To put this in context, back in 2013 FinTech spending reached under $19 million, with a total of 1,132 deals compared to 2,196 in 2018.While growth in the sector shows no signs of abating, the landscape has changed considerably, often in response to changing consumer expectations. With most financial services now accessible digitally – and many on mobile – consumers expect their experience or service to be efficient, frictionless, and affordable.
Payments, attracting high levels of investment
One of the areas that has seen consistently high levels of investment and innovation is payments. Globally, around 1.7 billion people remain “unbanked”, which means they have no bank account or access to a mobile money provider. A report from the central bank and FSD Kenya showed that in 2006 only 26.7 per cent of the population had bank accounts, with this figure rising to 82.9 percent in 2019. Apart from payments, as consumers become increasingly concerned about data privacy, interest in the use of cybersecurity in finance is growing. In particular, the application of technologies such as cryptography is predicted to be fundamental in the future of financial services.
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