Fintech and Blockchain Market to Grow 26.89% by 2027, New Report

The global fintech blockchain market is expected to grow at a compound annual growth rate (CAGR) of 26.89 percent between 2022 and 2027, a new report has shown.

The rising crypto-currencies market cap and Initial Currency Offering (ICO) are some of the major factors driving this growth.

Various financial institutions have adopted technologically advanced blockchain solutions, and this, alongside the increasing demand for distributed ledger technology, has also contributed to the gradual growth.

These developments in the financial industry – covering investment banks, commercial banks, insurance firms, among others – are providing customers personalized digital solutions and digital products that align more with their preferences.

Digital solutions such as mobile banking, digital banks, wallets, blockchain technology, and automated chatbots are some of the few examples experiencing rising demand as these improve overall operational efficiency in customers.

They offer a real-time settlement, reduce processing times, and the number of steps and intermediaries required to achieve the same levels of confidence in traditional processes.

The world has also seen increased adoption of cryptocurrencies for making payments. This is expected to continue and boost the blockchain market.

Data from Crypterium, a Fintech company, showed that the volume of crypto payments and the average amount increased in 2019, reaching a seven-month high in April to approximately 1.6 billion shillings.

It is expected that the cryptocurrency payment provider in the sector will offer new solutions for both merchants and customers to gain maximum returns.

Additionally, the number of wallet addresses has constantly been growing, and active wallets number worldwide have reached 34 million in the first quarter of 2019, increasing by 44 percent in the last 12 months. This will also strengthen the market in the future.

Insurance Sector

In the meantime, the insurance sector is expected to grow significantly given the increased uptake of blockchain technology.

This is set to negate the huge losses insurance companies are facing due to false claims and scams that happen every day in the industry. By implementing technologies like blockchain in their existing workflow, such firms will minimize or rid their products of such inefficiencies.

The blockchain offers transparent information about the transactions, which creates a sense of trust since the department that is responsible for verifying the authenticity of the claim and deciding on how much percentage of the claim can be covered is always in need of a trustworthy repository of data.?

Due to the rapid advancement of technology such as IoT, the amount of data created by the numerous connected devices is increasing multifold and thus requires technology that can manage a large volume of data.

With blockchain, insurance companies can manage large, complex networks by having the devices communicate and manage each other on a peer-to-peer basis, securely, instead of building an expensive data center to handle the processing and storage load. Having these devices manage themselves is significantly cheaper than the data center model and, thus, expected to drive the market in the future.

Competitive Landscape

The fintech blockchain market is competitive and is dominated by a few major players like Amazon, AlphaPoint, Bitfury, Oracle, and Digital Asset Holdings.​

These major players with a prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability.

However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.