An assessment of the financial services IT industry, including its market size, trends in the industry, growth drivers, challenges, and leaders in the space.
In the US, the financial services IT industry is called fintech. As described by Investopedia, fintech includes all software and technologies set out to "improve and automate the delivery and use of financial services."
The global fintech market was reportedly worth $127.66 billion in 2018 and is forecast to reach $309.98 by 2022 at an annual growth growth of 24.8%. The US accounts for 57% of the global fintech market.
Venture capital funding for private fintech companies in the US reached a total of $18 million in 2019, up from $13 million in 2018.
The leading companies in the US fintech industry are Square Inc, Avant, Stripe, Affirm, and Ripple.
According to PWC, almost 80% of financial services companies plan to incorporate blockchain into their operations by 2020.
The growth of the industry is driven by "the digital commerce market and proliferation of mobile technology."
Cloud In the Financial Services Industry
The global finance cloud market is expected to be worth $29.47 billion in 2021. Regionally, North America would have the largest market share "because of the wider internet penetration, strong economy and the shifting of isolated infrastructures to the cloud. This will result in reduction of Capex spend, lowered complexity in IT management and improved security and agility."
Financial services companies are now moving to cloud-based platforms due to its ability to offer unique services, such as new investment methods.
Most financial services "companies are big and bulky. Over the years they have become siloed, and are hard to change. IT could not keep up, but with cloud-based platforms that are scalable on demand, and quick to change, they may be able to fix that problem."
At cloud computing’s "core is the ability to provide more efficiency. This includes the ability to have much lower operational costs. While the financial sector has not had to economize much in comparison to other vertical sectors, today they want to tighten IT belts through a strategic move to the cloud."
The major categories of cloud in the financial services industry in the US are:
Card and Mobile Payment Processing (led by Visa and Mastercard).
Marketing and Customer Relationship Management: This sub-sector is led by Salesforce and OMI.