During the Economic Crisis, the FinTech Industry Shows Unprecedented Growth
It has been foretold since 2019, that in the event of a possible economic recession, the FinTech industry would be one of the few industries to benefit. This prediction has come true, as the one of the most daunting economic recessions in recent history is taking place, and the FinTech continue to grow at an accelerated pace.
This tendency is largely explained by the fact that, with social distancing measures ensuing, there has been a higher demand for financial services that allow people to carry their transactions easily from home. Although many traditional banks and financial entities offer some services through their websites, by phone or through applications, they tend to be far more burdensome and complicated than the services and products offered by specialized FinTech companies. This has reflected in a radical increase in the use of FinTech applications, particularly in Europe, where their usage has grown by over 70%. A trend which has been far more prominent in younger users, between 25 and 35 years of age.
With an expected worth of at least $300 billion dollars by 2022, FinTech is consolidating as one of the fastest growing industries, having already reach 1% of the total financial services market. Although this percentage might not seem too large at a first glance, it is outstanding considering how young the industry still is. The percentage of financial services which are lent through FinTech platforms and applications is expected to increase exponentially in the upcoming decade, perhaps even displacing more traditional options eventually.
The fact that the growth of FinTech services was exacerbated by the social distancing measures does not mean that the tendency will end as such measures conclude. It is unlikely that people would go back to traditional financial and banking services after having experienced generally much faster and practical options, which usually come at a lesser cost. Furthermore, given the fact that the FinTech trend has been more prominent among young users, it is yet more likely to continue in the long term.
One of the most interesting aspects related to the potential growth of the FinTech industry is the possibility of it providing a viable solution that leads to full inclusion into the financial markets. Today, it is estimated that over a third of the global population does not even have access to a bank account. This is one of the biggest problems currently faced by the financial sector, as greater financial inclusion would mean more dynamic markets and faster growing economies. FinTechs could be leading the way into financial and banking services finally being accessible to the entirety of the population.
It is clear the FinTech industry has the potential to become one of the biggest and most important ones in the near future. And with so many emerging startup companies aiming to innovate, there are just as many possibilities for investors to capitalize and find the next unicorn. With that said, there is one specific company which is promising to create the next and perhaps the biggest groundbreaking Fintech innovation to date. Konzortia Capital is developing an entire distributed ledger framework for the whole financial industry to operate, ranging from individuals to companies and regulators. In this financial ecosystem it will be possible to access advanced banking services, raise capital and invest globally, as well as to access a secondary market of liquid stock-like digital private equity assets. With its first MVP soon to launch into the market, this is the perfect time for investors to get an asset that could radically increase their net worth.