DIMOCO trend update: Why is the fintech market growing so fast?
The velocity of growth in the fintech market is breathtaking. In 2015, global fintech investments reached $22.3 billion. That’s an astounding 75 percent jump from $12.7 billion in 2014, according to an Accenture study. Even more amazing, this commitment to financial technology doesn’t appear to be slowing in 2016. In this year’s first quarter, outlays in this sector reached $5.3 billion, which is a 67 percent improvement over the same period in 2015.
How has this sector gotten so hot?
1. The technology market boom: Broadly speaking, technology has been developing in directions that have paved the way for an expansion in financial technology. Breakthroughs with smartphones, phablets, wearables, applications, web platforms, cloud services and the internet of things along with more bandwidth and powerful mobile networks have opened the door for a host of fintech possibilities.
2. People want technological upgrades: Everyday, we’re exposed to new bits of tech that make our lives easier. There’s smart health, smart TV and even smart cities, to name a few. So why not smart financial services? It’s already happening in the way people use mobile banking to do their wire transfers and carrier billing to purchase their web content and services. But, consumers desire more.
3. New biz chances: As much as banking institutions are large administrative beasts burdened with so many day-to-day issues, they recognise that they must also think about tomorrow. They see all the technological advancements around them and recognise a business opportunity. Tech is the future, and they don’t want to be left behind.
4. Case study: Carrier billing is one of the best examples of fintech success. The ability to pay through a mobile network operator started more than 10 years ago. It was such a fintech innovation that it got many content providers into the digital market and, as a result, they saw their businesses grow. The trajectory carrier billing represents serves as an inspiration for fintech growth elsewhere. It’s a role model for new businesses looking to come up and find their place in the market.