The financial services sector is set for substantial growth in the next few years as several factors converge.
The global market is anticipated to reach more than US$37.5 trillion dollars by 2027 at a compound annual growth rate (CAGR) of 7.5% according to the latest report from The Business Research Company.
Evolving consumer needs, technological advancements, and regulatory changes are among the key drivers of this growth with several markets expected to see notable growth in the coming years.
Open banking is evolving at different rates around the world, but this is seen as one of the major growth factors with a market estimated to be worth more than $62 billion by 2027. A growth rate of almost 27% (CAGR) will be aided by increasing adoption of online payment platforms.
Contactless payments demand is also boosting the smart card market towards a $27.5 billion market.
Meanwhile the B2B payments market is also set for significant growth (9% CAGR) to more than $1 trillion as global trade escalates.
P2P LENDING
Peer-to-peer lending is another industry set for significant growth thanks to technology such as decentralized P2P mobile browsers that allow users to sidestep any internet censorship and enables people to access and share information in and across regions where connectivity has been interrupted or compromised.
One of the companies leading this technology is Montreal-based eQualitie which recently launched what it claims is the world’s first decentralized mobile P2P browser called Ceno. The firm says that it is currently being used by those in areas where regimes disregard digital rights such as Myanmar, Iran, and Russia. It’s also being used in Ukraine due to internet infrastructure having been destroyed in the war.
“Ceno holds great promise and launches at an opportune time for those engaged in democracy movements and activities,” says Dmitri Vitaliev, founder, and director of eQualitie. “It is already helping thousands of civilians, NGOs, investigative journalists and independent media internationally to share information on their mobile devices.”
Micro-lending is also expected to grow, at a CAGR of 12% to $305 billion, driven by micro-lending services among end-users, including micro-enterprises and small enterprises.
Insurance gains
As a large sub-sector of financial services, the global insurance market is also in line to see exponential growth as emerging trends expand.
These include boiler insurance (14% CAGR to $18 billion), equity indexed life insurance (13% CAGR to $6 billion), variable life insurance (6% CAGR to $157 billion), and property & casualty reinsurance (11% CAGR to $718 billion.