29 May 2024 - The FinTech sector is undergoing a sea change from growth to profitability. 2023 was the year of rebalancing, characterised by reduced capital flows resembling pre-pandemic levels.
However, industry and sector fundamentals remain strong.
Financial Services is One Of The Most Profitable Sectors Of The Global Economy
Annual Fintech Revenues Will Grow Six-fold To Reach $1.5 Trillion By 2030, Heavily Skewed Towards Banking Segment
We see promising growth from global FinTech markets.
By 2030, digital payments and lending will continue to remain the largest Fintech segments, however neo-banking, insureTech and financial infrastructure will be the fastest growing segments.
Japan's stock market experienced a strong performance in 2023, exceeding expectations and outpeforming many othe developed markets. The Topix rose by 24% in local currency terms, while the Nikkei 225 climbed by c. 30%to hit levels not seen since 1989. These increases have put Japan among the bestperforming stock markets globally.
Singapore also remains a top FinTech fundraising node globally
Singapore is a key gateway for global asset managers and investors with US$ 3.65 trillion (S$4.9 trillion) of assets under management (AUM)1. Private Equity and Venture Capital accounts for S$ 587 billion of AUM. There are about 1,100 Single Family Offices (SFOs) that were awarded tax incentives by The Monetary Authority of Singapore whom together managed about S$ 90 billion as of 2021.
FinTech has disrupted banking, with consumer demographics shifting towards FinTech and away from banks. Monzo, one of the earliest app-based challenger banks to emerge, is now the 7th largest bank in the UK. Digital-only FinTech apps including Monzo, Nubank, Starling and Cashapp are reaching unit economic profitability.
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