Fundamentals strong for global fintech

Funding for the sector hit a three-year low last year but revenues improved

Global fintech funding in 2023 stood at a three-year low at $42 billion, down 50 per cent and 71 per over the two previous calendar years, according to a Boston Consulting Group report. For the same period, revenue multiples have come off their 2021 high at 20 times and were at a sobering four times in 2023. The silver lining is that revenues in this timeframe have moved up: To $320 billion, up 12 per cent and 30 per cent, according to the ‘Global Fintech 2024’ report.

It said that the challenges are part of a short-term correction – a tempering of investor enthusiasm. Despite the current funding challenges, the fundamentals that have fuelled the fintech sector from the beginning remain in place and promise continued growth. The report expected fintechs to reach a market size of $1.5 trillion in revenue by 2030: A growth of roughly five times from 2023. The upside for fintechs continues to be vast with 1.5 billion unbanked and 2.8 billion underbanked adults across the world. Of course, these potential customers are also available to incumbent banks, which will have their own opportunities to grow.