The rise of fintech firms is revolutionising industries worldwide, offering innovative financial solutions that streamline services, improve customer experience and increase accessibility.
According to Andrew Maren, founder and CEO of short-term asset finance fintech ProfitShare Partners, there has been exponential growth seen by the global fintech sector over the past decade and is expected to continue at a rapid pace.
“Projections suggest the global fintech market will grow at a compound annual growth rate (CAGR) of 20% over the next five years, driven by increasing demand for digital services, blockchain technologies, and mobile-first solutions,” Maren asserts.
“Casting a glance across the financial services arena is an interesting exercise, and one I’d suggest SMEs and other businesses take a moment to do.”
What sectors are benefiting from fintech innovation?
Payments and Money Transfers
“Fintech has significantly enhanced the speed and cost-efficiency of payments and money transfers, particularly for cross-border transactions, which are massive in Africa,” says Maren, noting that by leveraging blockchain and AI technologies, companies like PayPal enable real-time settlement and lower fees.
“The global digital payments market is forecast to exceed $10 trillion by 2026, making this sector a key beneficiary of the technology.”
Wealth management
Experts suggest that robo-advisors and AI-powered investment platforms are democratising access to financial advisory services. Maren says Fintech firms offer lower fees, personalised recommendations and simplified investment processes, benefiting both novice investors and seasoned traders.
“The automation and scalability of fintech in this sector are driving substantial growth and one such firm – Bokra, an Egyptian fintech company – recently successfully closed a pre-seed Funding round of $4.6 million with its aim of offering a unique platform for goal-based investing.”
Lending and credit
Fintech has transformed lending through peer-to-peer (P2P) platforms and digital underwriting processes, making credit more accessible for individuals and businesses, providing faster approvals and more flexible terms compared to traditional lenders. “Like ProfitShare Partners, fintech innovation in this arena is reducing operational costs, increasing transparency, and enhancing user experiences,” Maren says.
Which sectors are most at risk of disruption?
Industry analysts predict traditional banking, insurance and loan financing firms are at significant risk if they fail to adapt to the fintech revolution, and Maren concurs. “Legacy systems, slow adoption of digital solutions and high operational costs put these industries at a disadvantage.
“However, banks can catch the wave by investing in digital banking platforms and partnering with fintech firms to enhance mobile and online offerings,” he says.
“Insurance companies now need to leverage data analytics and AI to streamline claims processing, and loan financiers should explore alternative credit scoring models and faster loan approval mechanisms to remain competitive.”
Case studies: Notable fintech firms
Banking: Revolut
Launched in 2015 by Nikolay Storonsky and Vlad Yatsenko in London, Revolut started as a digital banking app offering currency exchange services without fees. It has since expanded to offer a wide range of financial products, including stock trading, cryptocurrency investments, and premium banking services.
Revolut now serves over 25 million customers globally, positioning itself as a leader in neobank services by combining flexibility, low fees and comprehensive financial tools.
Insurance: Lemonade
French fintech Lemonade targets tech-savvy and price-conscious customers looking for an alternative to traditional insurance companies. The company’s technology and customer-centric approach appeal to customers who want a more convenient and efficient insurance experience.
Maren says the company uses AI and behavioural economics to offer renters, homeowners and pet insurance. “Like most fintech firms, Lemonade is disrupting the insurance industry with a quick, user-friendly application process and instant claims approval and appeals to a younger, tech-savvy audience, which is encouraging rapid growth.”
ProfitShare Partners
In South Africa, Maren’s fintech ProfitShare Partners (PSP) has become a crucial player in SME financing by offering short-term capital to small businesses on presentation of purchase orders. Says Maren: “Since 2017, PSP has enabled SMEs to access the funding necessary to secure large contracts and grow their operations, leading to job creation and economic development.
“By simplifying access to credit and tailoring solutions to the unique needs of SMEs, ProfitShare Partners has made a tangible impact on the local economy.”
The continued rise of fintech promises significant opportunities for various sectors while posing risks to industries that resist adaptation.
“Companies that embrace digital transformation and fintech partnerships stand to thrive in an increasingly connected and innovative financial ecosystem,” Maren concludes.
