US FinTech market has been largely driven by the technological developments such as data analytics, social networks and increased penetration of the smartphone have led to the emergence of newer models such as marketplace funding, people based marketing and several others. Digital connectivity, faster payment options, lower customer acquisition costs through referrals on the social networks have all contributed to the growth and innovation in the FinTech in the US.
The FinTech market has increased in terms of the transactional value from 2010 to 2015 at a CAGR of 24.5% during 2010-2015.
Digital payment segment (consisting of digital commerce, mobile wallets and P2P money transfers) was by far the most revenue generating segment that saw maximum customer interest and participation. The segment was majorly driven by the overwhelming sales of e-commerce market in the country. PayPal, Authorize.Net, Stripe and Square were the major payment gateways used by online retail merchants for the purpose of receiving online payments. Apple Pay, Android Pay, Samsung Pay and PayPal wallet were the most used mobile wallets used by customers for making online and in-store payments in the US. Advanced payment security, faster checkout, loyalty rewards and customer ease have been the major factors driving the mobile wallets market in the country. However, Delay in adoption of the required infrastructure such as NFC terminal by retail merchants have prevented mobile wallets from achieving mainstream adoption. Dwolla, Venmo and Chase QuickPay were the pioneers in the space of P2P money transfers. P2P transfer systems have become increasingly prudent to the customers in the US due to absence of a common network for all financial institutions. Peer-to-peer payment apps have made it highly convenient for customer transfer money and their services usually are accompanied with very nominal charges or even free of cost.
According to Ken Research Analyst Robo Advisors, sub-segment of personal finance sector has grown stupendously during the past few years from 2010 to 2015. Technologies such as the big data, machine learning and others have attracted considerable investment and attention and have allowed robo advisory space to flourish. These firms leverage algorithms and client information to develop preset portfolio distribution and suggestions for investments particular to the individual clients. The advisors can be accessed via rich digital user interface and at very low fees. The robo advisors offer higher transparency as compared to the traditional investors and hence attract more investments. Major players in the market include Vanguard, Charles Schwab Intelligence Portfolio, Betterment, Personal Capital and Wealthfront among others.
The market for business finance was almost entirely driven by business lending companies which raised funds to startups from several industries from both accredited and non-accredited investors. Several business lending companies have come in the last five years which approve funds to applicants within no time. Funding Circle, On Deck, Kabbage, CAN Capital and Lending Club are some of the major companies operating in this space amongst others. FinTech companies allowing crowdfunding started off since 2012 and were almost a billion dollar industry by 2015. EquityNet, Fundable, Angel List and Crowdfunder are some of the key companies that have the first mover advantage in this space. Business finance market has also grown at a rapid pace in the last five years during the period 2010-2015.
According to the research report, the US FinTech is anticipated to grow at a rapid pace between 2016 and 2020 to USD 8.0 trillion in 2020. P2P money transfer and robo advisor sectors are likely to emerge as the largest contributor to the same.
“Evolution of new tech-savvy startups that have been able to perform things better, faster and in a cheaper way than conventional financial institutions has redefined traditional businesses such as lending, payments and investments. The skyrocketing growth of the industry has created numerous opportunities for every stakeholder of the FinTech ecosystem.”, according to the Research Analyst, Ken Research.
Ken Research announced its latest publication on “US FinTech Market Forecast to 2020 – Mobile Payments and Robo Advisors to Shape Future Growth” which provides a comprehensive analysis of the FinTech market in the US and covers market size and segmentation of overall FinTech market by business models. The report covers the further segmentations of different spaces such as Digital Commerce, Personal Finance and Business Finance into sub segments based on the business models. The sub segments (US Digital Commerce Market, US Mobile Wallets Market, US P2P Money Transfers Market, US P2P Lending Market, US Equity Crowdfunding Market, US Robo Advisors Market and US Business Lending Market) are then considered separately and analysis on them has been done individually. The report covers detailed profiles of leading players in the different sub segments along with the share of major players in the market. The potential and future outlook has been individually discussed for the US Digital Commerce Market, US Mobile Wallets Market, US P2P Money Transfers Market, US P2P Lending Market, US Equity Crowdfunding Market, US Robo Advisors Market and US Business Lending Market and also for the overall FinTech market. The report provides detailed analysis of segments, trends & developments, growth drivers and major restraints and challenges within the industry. The report also serves as a benchmark for existing players and for new players who wish to capitalize on the market potential and investors who are looking forward to venture into the FinTech market in the US.
Key Topics Covered in the Report:
Key Products Covered in the Report
Companies Covered in the Report
Ankur Gupta, Head Marketing & Communications