Resilient growth in fintech industry: World Economic Forum report

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Davos [Switzerland], January 19 (ANI): A recent report released by the World Economic Forum sheds light on the robust and resilient state of the global fintech industry, showcasing its capacity to expand financial services to traditionally underserved consumers and businesses.

Towards Resilient and Inclusive Growth, the report is a collaborative effort with the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School.

Drawing insights from a global survey of over 200 fintech companies across five retail-facing industry verticals and six regions, the report captures the dynamic landscape of the fintech ecosystem.

The report indicates that the global fintech industry is robust, with customer growth rates averaging above 50% across various industry verticals and regions. This resilience is particularly noteworthy amid an uncertain economic outlook.

Consumer demand emerges as the primary driver of growth in the fintech sector. Fintech companies are tailoring financial services and products to address the needs of traditionally underserved segments of the population.

The majority of fintech companies express a positive view of their regulatory environment, with 63% rating it as adequate. However, the report highlights that regulatory compliance can be challenging for some fintechs, calling attention to areas where improvements can be made.

Drew Propson, Head of Technology and Innovation in Financial Services at the World Economic Forum, remarked, “It is highly encouraging to see fintech performance remain strong after the COVID-19 pandemic, with average global customer growth rates above 50% from 2021-2022; however, identified headwinds such as a difficult macroeconomic climate and decreased fintech funding cannot be ignored.”

He added, “Overcoming these challenges and realising sustained social and economic benefits from the fintech industry will require continued data gathering to better understand pain points and committed support from public and private sector actors within financial services.”

The report identifies headwinds such as a challenging macroeconomic climate and decreased fintech funding, emphasising the need for collective efforts from public and private sector stakeholders to overcome these challenges.

Of particular note is the finding that many fintechs are actively expanding the provision of financial services and products to underserved segments of the population.

This positive trend is observed in both advanced economies and emerging markets and developing economies (EMDEs), showcasing the industry’s impact across diverse regions.

The report concludes with actionable insights for public and private sector decision-makers, highlighting the importance of streamlining compliance processes, improving consumer education, and enhancing trust in the financial system.

Bryan Zhang, Executive Director, and Co-Founder of the Cambridge Centre for Alternative Finance, stressed the need for regulatory innovation to match financial innovation, emphasising the enormous potential of digital financial services to widen access to finance globally.

“As the global fintech industry continues to grow and evolve, it is imperative that the pace of regulatory and supervisory innovation match that of financial innovation. This report highlights the importance of having an appropriate and adequate regulatory environment that is conducive to the scalable and sustainable development of fintech,” said Zhang.

He added, “The study findings also indicate the enormous potential of digital financial services to widen access to finance for consumers and SMEs by providing more accessible, affordable and personalised financial products and services.” (ANI)

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