Fintech revenues projected to grow 6x by 2030
Fintech revenues are projected to reach $1.5 trillion by 2030, according to a new report from Boston Consulting Group and QED Investors.
Why it matters: Despite last year's turbulence, analysts remain bullish on the fintech industry and expect it to pick up a significant share of global financial services revenue by the end of the decade.
By the numbers: The report projects fintech revenues are expected to grow sixfold by the end of the decade, from $245 billion in 2021.
- In the same time period, fintech's share of global financial services revenue is expected to jump to 7% from 2%.
- Growth is forecast to be strongest in the Asia-Pacific region, which is expected to leapfrog the U.S. and become the world’s top fintech market by 2030.
Between the lines: The report acknowledges the turbulence of the last 12 months, noting that new fintech funding has dropped 43% and valuations have fallen more than 60% since April 2022.
- That correction is due, in part, to a lack of profitability across the sector — even for highly valued late-stage companies.
- “Of the roughly 85 public fintechs BCG analyzed across all regions and segments in 2022, less than half (45%) were profitable,” it notes.
Yes, but: The report finds ample room for growth in the industry, noting the large number of unbanked (1.5 billion adults) and underbanked (2.8 billion adults) people globally.
- It highlights the Net Promoter Scores (NPS) among fintechs (as high as 90) relative to the average banking industry NPS of 23.
- And it points to the relatively low level of digital use in banking (~39%) as a driver of growth.
The big picture: The growth-at-all-costs days are behind us, and the fintech winners of the next half-decade will be those prioritizing profitability and product-market fit.
- Fintechs could use the current downturn to gain market share by entering new locales or markets and exploring M&A opportunities while valuations are more reasonable.