Considering Fintech Investing? Read this!
The Fintech sector is saturated, and mature innovators are setting the bar high for everyone else. Against this backdrop, “challenging the incumbents” is no longer a competitive advantage. To get investors’ attention, you need to be solving a clear, pressing market need that no one else is addressing. Not only that, but your argument must be simple to articulate and supported by evidence.
Not only that, but your pitch must be simple to understand and backed up by market research that shows the offer is worthwhile. Investors will eventually inquire as to why you are doing this. What are you doing that is different from everyone else? What evidence do you have that you — and only you — are capable of accomplishing this? They’ll also want to know how defendable your argument is once you’ve put it together.
The bond between finance and technology has grown so strong that the emergence of fintech as a distinct field developed fast and nearly without causing market disruption at first. Fintech is one of the fastest-growing industries today, with several investment and development prospects. Both require major talents to take full use of, and the latter scenario necessitates a significant amount of time.
Both require major talents to take full use of, and the time required to develop such skills in the latter case might be extremely lengthy. However, even on the investment side, there is a lot that can be done to get ahead of the competition and create a solid foundation for yourself.
Despite the losses in 2020, according to Research and Markets, the worldwide fintech market is likely to develop at a compound annual growth rate of roughly 20% between 2020 and 2025, reaching a market size of around US$305 billion.
Fintech innovation and investment have been fueled by an increase in venture capital investment, investor interest, and private equity investment. Continue reading to learn more about this burgeoning market.
Fintech investment: An overview of the global market
Paytech is the largest part of the Canadian fintech ecosystem, accounting for 25% of the market, according to the Fintech Growth Syndicate. Payments Canada defines a paytech company as one that employs technology to facilitate the electronic transfer of value.
Emerging technologies such as AI, blockchain, and cybersecurity will continue to grow, according to KPMG’s report.
Global credit card networks like Mastercard (NYSE:MA) and Visa (NYSE:V) are significant drivers of this activity, according to the report. According to the business, “Mastercard and its colleagues are using fintech acquisitions as a strategy to redefine themselves and communicate to the market that they are more than just a set of payment rails.”
How to start Investing in Fintech
If you’re serious about investing in fintech, there are a variety of options available, including exchange-traded funds (ETFs) and equities. Fintech ETFs allow investors to gain exposure to a variety of firms at once. Stocks in the financial technology sector businesses are springing up left, right, and centre, and for some investors, this might be daunting.
Regardless of your investment strategy, it’s apparent that the fintech sector has developed significantly in recent years as more private equity and fintech investors have entered the market. Companies are continuing to innovate in finance and, as a result, in capital markets. It appears that the industry will continue to grow in the future.