FinTechs are booming
FinTech (financial technology) is increasingly popular in the world, thanks to the wide variety of possibilities it offers when any economic transaction comes out. This rise of FinTech has made its growth seem rather beneficial.
According to a report by Colombia FinTech, for this year, the financial technology forecasts a growth of more than 12%, specifying that the number of companies dedicated to this type of technology, is increasing steadily.
At the end of 2021, the amount of companies that offered financial services of this type increased by 16%, specifying that an average of 14 initiatives were executed. The biggest increase was in the digital credit sector, with nearly a third part of enterprises. It is followed by the digital payments segment with 26.42% and corporate finance with 10.37% stake.
Colombia´s FinTech President Erick Rincón said at an event that he sees a significant increase in the number of companies in Crypto and blockchain, as well as PMF (Personal Finance Manager), which shows that FinTech will be more and more necessary. It also reflects the integration of technologies and the appetite for new ways to invest and save.
For its part, the segments of crowdfunding (collaborative investment), insurtech (digital insurance) and neo banking have developed thanks to new regulatory advances and digital-focused business models.
FinTech equals more incomes
The earnings generated by FinTechs have also shown a considerable growth. From 2017 to 2021, FinTech revenues grew by 27% each year. Adjusting for inflation, the ecosystem achieved a record number of $3.7 trillion in 2021, which represents 0.31% of Colombia’s GDP (gross domestic product) in 2021.
As for the digital payments segment, it leads the ecosystem, with real incomes of $2.29 billion in 2021, followed by digital credit with $940 billion. The Colombia`s FinTech report indicates that the growth rate of total ecosystem revenue in 2021 increased by 74% compared to 2019. The segments that grew the most were neobanks, crypto and blockchain and PFM & wealthtech.
Who uses FinTech?
According to the same report, the big companies are the ones that use FinTech the most with 28% of implementation. However, the unbanked people follow them closely with the same 28%.
Other target customer segments for these companies are the banked people (21%), the pymes banked (18%) and the pymes unbanked (6%).
During the pandemic years (2019–2021), the employment generated by companies in this sector had an overall growth of 10%. In particular, six of the nine segments saw an increase in the number of employees.
According to Velmie’s FinTech Market Forecast report, the average growth of FinTech sectors in 2022 will be 12.5%. The finance and lending sector is expected to see a 22.9% increase in business volume. So if you want to apply this financial technology in your blockchain projects, do not hesitate to seek advice from experts specializing in these issues.