Wednesday, 15 May 2019 00:27

Fintech platform revenues to reach US$638 billion by 2024

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Fintech platform revenues to reach US$638 billion by 2024 Image Stuart Miles at FreeDigitalPhotos.net

Revenues generated by fintech platforms will reach US$638 billion by 2024, driven by increasing consumer acceptance of fintech-powered solutions, according to a newly published research.

The Juniper Research report — Fintech Futures: Leading Innovators, Segment Analysis & Regional Readiness 2019-2024 — found that technologies such as machine learning, Big Data analytics and blockchain would be the cornerstone of fintech platforms.

And such technologies would 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, the report says.

According to the Juniper research, in light of rising customer acceptance of digital platforms for financial services, traditional players are responding rapidly – and 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 would 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,” Juniper said.

“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.”

And as explained by research author Michael Larner, “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,” he observed.

Meanwhile, the research found that heavy regulatory burdens imposed on financial institutions after the 2008 financial crisis also meant that direct entry, beyond partnerships, remained unlikely in the medium term for even large technology companies.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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