United States Fintech Market Witnessing Growth Spurts: Forecast to Grow at a CAGR of 10.1% by 2027 | BlueWeave
Delhi, NCR, Dec. 28, 2021 (GLOBE NEWSWIRE) — Fintech is growing at a high rate in the United States due to changing business models and the increasing emphasis on boosting customer interaction to boost revenue. Additionally, the increasing digitization of businesses and growing investment in fintech companies offer lucrative growth opportunities to the market….
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the United States fintech market is estimated to grow at a CAGR of 10.1% during the forecast period of 2021-2027. As customers have realized the advantages and ease of fintech, the US economy accounts for 57% of the global market. Fintech businesses in the United States received $59.8 billion in investment in 2019 from M&A, VC, and PE deals, totaling 1,144. Changing business models, growing emphasis on boosting customer interaction to boost revenue coupled with the increasing digitization of businesses, and growing investment in fintech companies offer lucrative growth opportunities to the market. Furthermore, structured government regulations regarding digital payment methods, banking, and credits are also anticipated to drive the growth of the United States Fintech market in the forecast period. However, high risks associated with data privacy and cybersecurity in the fintech platforms may act as a major restraint.
The growing need for improved client interaction is likely to fuel advanced technologies in the Fintech industry, such as artificial intelligence (AI). Fintech firms are increasingly turning on AI-based virtual support to handle customer problems and effectively engage with clients. Chabot helps organizations save money while also improving client satisfaction. Robo advisers and automated customer support are two of the most common AI solutions that help improve customer experience.
Growth of the E-Commerce Industry is Propelling the United States Fintech Market
With the growth of the e-commerce industry, the fintech market in the United States also benefits from significant growth opportunities. Financial technology continuously supports and improves online payment systems that ensure higher levels of security. Consumers who are more digitally aware and active are becoming more willing to adopt fintech into their everyday lives. The number of people using online mobile phone payments & digital-only banks has risen dramatically, as per analysis, the overall transaction value in the digital payment market was US$ 880 billion in 2018. Many fintech companies, such as PayPal, Stripe, TransferWise, Venmo, etc., offer digital payment services both to businesses and consumers. As more and more Americans rely on e-commerce platforms to acquire daily-use products, especially after the COVID-19 pandemic, the digitization of their daily lives contributes to the growth of the fintech market.
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Increasing Number of Fintech Startups is Driving the United States Fintech Market
The fintech market in the United States is booming with start-ups in various sectors such as banking, healthcare, education, etc. With the increasing number of start-ups, consumers will have access to a wide variety of services and platforms. Fintech start-up, for instance, Brex, offers corporate cards for credit lines and corporate lab expenses. Another platform called Varo acts as a digital bank for individuals, offering financial services, including savings accounts, money transfers, cash withdrawals, etc. Thus, with the growing number of start-ups, the United States fintech market is also set to grow.
US Government Support Fintech Technologies
Fintech is supported by the US government, which regulates financial products and services for consumers. This typically involves supervising the contracting process and information delivery. The government regulates financial products and services under a two-tiered structure. In some other cases, government agencies and quasi-regulatory, non-government entities establish general norms and regulations. The factor mentioned above leads to the growing fintech adoption trend in the United States.
United States Fintech Market – By Deployment
The United States fintech market is segmented into cloud and on-premise based on deployment. The cloud segment accounts for the largest market share as it allows businesses to store and manage data remotely and with higher security. It also provides small and medium-sized enterprises opportunities for expansion while eliminating the need to establish physical hardware setup for services. Moreover, cloud service companies like Amazon Web Services, Alibaba Cloud, etc., also give the cloud segment significant opportunities in the United States market.
Impact of COVID-19 on United States Fintech Market
The United States fintech market witnessed a tremendous boom after the emergence and spread of the COVID-19 pandemic in the country. As physical stores and the distribution of products were restricted, it resulted in a significant increase in e-commerce sales and the use of digital payment platforms during the period. Moreover, fintech platforms provided assistance and resilience to small and medium-sized businesses by supporting their adoption of remote working scenarios and their move toward digital financial services during the global health crisis. Last but not least, Fintech companies also provided lenders and borrowers with platforms for short-term loans and financial assistance to keep up their business during such difficult times.
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United States Fintech Market – Competitive Landscape
The leading players in the United States fintech market are Stripe, Klarna, Kraken, Chime, Plaid, Robinhood, Brex, Carta, Three-way tie, Square Inc., and other prominent players. Robinhood is the most well-funded fintech start-up in the United States, with $5.6 billion in total disclosed equity funding. During the pandemic, the San Francisco-based stock trading app witnessed a surge of retail investors, fuelled by both pandemic-induced investor boredom and the recent GameStop short squeeze.
The market is highly consolidated among industry giants such as Chime, Plaid, Brex, etc. Stripe, primarily a payment processing software and application, holds a dominant market share. The market players invest heavily in expanding their fintech services beyond payment and insurance and are targeting emerging areas, including blockchain and cryptocurrency, digital lending and credit, etc. Additionally, the number of fintech start-ups such as Clyde, Digit, MANTL, etc., are emerging with great potential and giving tough competition to established players.
More partnerships and fintech start-ups are projected to emerge in the future, particularly with the SaaS model. Other leading players are likely to enter the Fintech market and develop their offerings, benefiting customer platforms and data access. Financial institutions and fintech start-ups must be prepared to compete with internet giants like Google, Facebook, Apple, and others who are looking to expand their reach into the financial services sector, including payments, credit, insurance, and deposits. The banking industry will soon witness new developments due to effective partnership and collaboration with technology.
The report’s in-depth analysis provides information about growth potential, upcoming trends, and statistics of the United States fintech market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the United States fintech market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the market’s growth drivers, challenges, and competitive dynamics.
Recent Development
- In November 2021, PayZen, a healthcare fintech startup, announced to have raised USD 15 million in a Series A round led by SignalFire and other prominent investors. This investment is aimed towards expanding the ‘care now, pay later model for hospitals and patients in the United States.
Scope of the Report:
| Attributes | Details |
| Years Considered | Historical data – 2017-2020 |
| Base Year – 2020 | |
| Forecast – 2021 – 2027 | |
| Facts Covered | Revenue in USD Billion |
| Product Service/Segmentation | By Service Propositions, By Application, By Deployment |
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