As the world embraces technology and globalization, it is also changing the face of the financial industry. Fintech companies have exploded on the market in recent years. As recently as 2015, spending in the market surpassed US$17 billion for North America and in 2017, European investment hit the $4.7 billion dollars mark. The year 2017 became known as the year of instant digital payments as they captured 43 percent of the global payment market.
While North America has commanded the technology market, the dynamic environment has seen more companies throw their hat into the banking and technology arena. Check out these countries that are rapidly making a stance in the fintech industry.
Investors Flock To Mexico
Fintech growth in Latin America averaged 50 percent in the last few years and continue to attract the attention of investors as the destination for startups. With over 700 companies, the Latin American continent averaged US$186 million in venture capital in 2016, according to the International Development Bank. Mexico has been at the forefront of the fintech trend, being home to 238 companies that cover services from mobile payments to smartphone banking. As a result, Mexico has overtaken Brazil and now stands as the leading fintech market in Latin America.
So what’s driving the startup surge? Many of them are capitalizing on the increased demand for loans from customers and their dissatisfaction with the banking services. A Gallup poll found that 75 percent of Mexicans were unhappy with their current bank, leaving a large gap in the market where financial technology companies could step in. There is a revived demand for credit facilities including automated loans and credit repair consultations for those tackling past unpaid debts on their report. More consumers are becoming aware of the importance of their credit history and are looking to take control of their credit.
The Asian Market Is Joining The Game
In markets where the traditional banking system is less established, fintech companies are making more progress. In China, the pace of growth is fierce and in 2017, Chinese companies claimed five of the top ten slots in KPMG ranking of the top fintech companies. However, it is more than the rapid growth in startups that is driving China’s rise to the top of the fintech game. Chinese companies are being valued much higher on the fintech scale. The largest company in the Chinese fintech industry is valued at over $100 billion, matching its American counterparts, although China has been a more recent player. With a driving demand and investors enthusiastic about entering the market, it is no surprise that the Asian country has become the global leader in online lending in 2018.
What’s In Store For The Fintech Market
As spending and innovation efforts continue to pour into the fintech industry, we can expect to see the smaller players exploding onto the market. India, the hub of technology, is well on its way to embracing digital payments and with investors looking at the gaps in the Latin market, it is a safe assumption that we can expect the landscape of the fintech industry to change further in the rest of 2018.