New data from Juniper
Research has found that fintech platform revenues will reach $638
billion by 2024, up from an estimated $263 billion in 2019; driven by
increasing consumer acceptance of fintech-powered solutions.
According to the new research, Fintech
Futures: Leading Innovators, Segment Analysis & Regional Readiness
2019-2024, technologies such as machine learning, Big Data analytics
and blockchain will be the cornerstone of fintech platforms. These will
fundamentally alter the way financial services are delivered and drive
fintech platforms to become the ‘new normal’. Such technologies will
make new use cases mainstream, including smart contracts, loan
underwriting using AI to analyse non-traditional data sources, and
personalised insurance policies based on IoT-generated data.
For more insights, download the free whitepaper: The
Future of Fintech ~ The New Standard.
Incumbents Not Idly Standing By
In light of rising customer acceptance of digital platforms for
financial services, traditional players are responding rapidly.
Incumbents are attempting to replicate the fintech firms’ offerings; for
example with digital banking offshoots (Marcus from Goldman Sachs) or
new services (HSBC’s Wealth Compass). The research argued that
incumbents will use these strategies to appeal to users outside their
normal target audience, such as millennials, to secure future revenue
streams.
Where incumbents cannot replicate the fintech platforms, they are
partnering with fintechs. For example, Austrian banking group Bawag is
using Spotcap’s lending-as-a-service platform to support SME lending.
However, the research claimed that the challenge would be to integrate
these partnerships in a seamless way, keeping friction low and
maintaining control of the overall customer journey.
Research author Michael Larner explained: ‘The distinction between
the fintech suppliers and traditional incumbents will blur in the 2020s;
digital engagement will become the norm. The winners will be those that
provide personalisation allied to an outstanding customer experience’.
Regulation in Fintech Major Stumbling Block
Meanwhile, the research found that heavy regulatory burdens imposed on
financial institutions after the 2008 financial crisis also mean that
direct entry, beyond partnerships, remains unlikely in the medium term
for even large technology companies.
Juniper Research provides research and analytical services to the global
hi-tech communications sector; providing consultancy, analyst reports
and industry commentary.
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