The rise in fintech start-ups

The number of fintech startups has nearly doubled in the last year. What's behind this growth? And which regions are leading the way?

The fintech industry is seeing a surge in start-ups. According to data gathered by Swedish company Finaso.se, part of Finixio's personal finance comparison network, the number of start-ups in the sector almost doubled in 2019, reaching over 21,700 companies globally.

 

What's driving the rise in fintech start-ups?

This flood of new businesses comes off the back of the fintech industry's rapid growth, which has been powered by rising demand for financial technology solutions.

There are three main drivers behind the growth in fintech start-ups says Elias Ghanem, Global Head of Marketing Intelligence at Capgemini Financial Services. These are changing customer expectations, fintech start-ups' disruptive nature and traditional financial institutions looking for new ways to stay relevant.

"One of the most pertinent growth drivers is changing customer expectations - especially among the millennials - towards digitised services. More and more millennials and tech-savvy consumers are turning towards non-traditional players such as fintechs, bigtechs and challenger banks for an enhanced digitised experience in areas such as payments and lending," he says, noting that traditional banks struggle to provide this.

"Secondly, fintechs have shown an agile mindset coupled with risk-taking behaviour in exploring disruptive technologies. With their innovation-oriented start-up culture, they are attracting funding, [from those] who want to be part of the next disruption in the financial industry. In a way, fintechs are like an extended body for the banks to take risk and bring in innovation."

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