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Fintech 2017: 3 Reasons The Industry Will Continue To Grow In Popularity

Fintech 2017: 3 Reasons The Industry Will Continue To Grow In Popularity

The fintech industry has come a long way since the turn of the century. Investment into global fintech surpassed $1 billion for the first time in early 2009, with that figure growing to over $20 billion at the end of 2016. This growth is set to continue throughout 2017 and beyond.

Although the initial surge in fintech was sparked by the 2008 financial crisis, when banks were slapped with heavy regulatory restrictions, many experts believed that the industry was set to slow down after the 2015 boom. However, there are 3 main reasons why fintech will continue its rise throughout 2017 and the coming years.

Frictionless innovation and disruption

When people talk about “fintech” you can be certain that “disruption” and “innovation” will shortly follow. The terms go hand-in-hand.

We live in a fast paced world where we have less and less time for every-day, mundane tasks. To get things done faster is not the only requirement; we want it done better at the same time. This combination of faster and better is what drives innovation and disruption within the fintech industry. Nowhere is this more evident than when it comes to day-to-day financial transactions.

Mobile payments, for example, saw a huge increase throughout 2014 and 2015, with Apple Pay leading the charge. And although Apple was the instigator that started the disruption in the mobile payments industry, other players have entered the market since then.

Payments volume through mobile devices and programs are set to reach $500 billion by 2020. This steep rise is partly due to well-known brands like Google (Google Wallet), Microsoft (Microsoft Wallet) and Mastercard (MasterPass) getting in on the action but also in large part due to innovative new startup platforms like Paydiant.

Payments are made even simpler with the advancements in contactless technology like NFC (Near-Field Communication), which allows the user to make a payment by just bringing the payment device in close proximity to the receiver. No need for entering a pin or the laborious task of scribbling down a signature.

Mobile payments are just one element within fintech. Without even mentioning how blockchain is revolutionizing the banking industry or the impact of peer-to-peer lending in the funding environment, it’s easy to see why fintech has become so popular: it looks at areas of the consumers’ financial life that can be improved or simplified and then provides a solution.

Political movements

North America and Europe have traditionally been the hotspots for fintech investment, accounting for $11.6 billion of the global fintech investments 2016. However, political tremors like “Brexit” (UK’s vote to leave the EU) and Donald Trump elected as US president have made investors hesitant and forced them to look elsewhere, with Africa and Asia emerging as key markets.

It is estimated that as much as 80% of the population in Africa does not have access to traditional financial services (i.e. banks, credit unions, etc.). While at least a third of the African population have access to internet, it is forecasted that by 2020 more than 66% will have access to a mobile device, including mobile broadband. This presents a massive opportunity for fintech startups to invest and penetrate the market, with the stronger economies of Nigeria, South Africa and Egypt likely to be the main targets.

On the other hand, investment in the Asian fintech market has seen growth of epic proportions in the last few years. In the 2014 $790 million was invested in fintech but by 2016 this figure stood at $10 billion. Thats more than a 10 fold increase in just 3 short years.

It’s not surprising either. Asia accounts for more than half of the world’s population with the infrastructure growing increasingly more robust in these parts. This is evident from the fintech boom experienced in countries like China, India, Singapore and Hong Kong, giving their western counter parts a solid run for their money.

The global reach of fintech innovation is therefore on a steep upwards curve. Investment in fintech startups in these emerging markets, coupled with the well-established fintech hubs in Europe and North America only adds to the industry’s rising international popularity.

The need for improvement

There’s no denying that the financial industry has been in dire need of an overhaul. Out dated systems and corporate red tape has often made it difficult and time consuming for many customers to make use of basic financial services.

As human beings we naturally gravitate to processes that make life a bit simpler and more efficient. Unfortunately, the same can’t be said for many of the traditional financial institutions who have been slow to adopt change. This tardiness to change and the increasing frustration of consumers have therefore created great opportunities for fintech startups to plug in the gaps.

Not only that but the fintech industry is an exciting and fun circle to be part of, attracting some of the most driven and talented minds the world over. As human beings we want to innovate and advance which is why the multicultural fintech hotspots of Amsterdam, London and Berlin (to name just a few) is flourishing.


Our need for continued improvement, coupled with political rifts and the increasing frustration of transacting with “old” financial services giants, all contributes to the rise of the fintech industry’s popularity. As a whole, the industry has seen a global embrace that doesn’t look to be going anywhere soon.

Fintech innovation continues to provide lucrative opportunities for investors, entrepreneurs and employees alike. It’s paving the way forward for an even more function-specific approach to technological development, as is evident by the surge in regtech, insurtech and other finance factions.

Most importantly, it has enabled customers to scrutinise the service and products on offer from their current financial service provider and given them the opportunity to change if they are not satisfied. This in turn has increased competition resulting in lower fees. An overall win-win for consumers.