While we may be halfway through the year, it’s never too late to start a new business. If you’ve had it in your mind and you’re considering the fintech sector, you might be wondering which areas are ripe for investment. There are lots of key fintech industries for investment that have promising current, short-term, and long-term prospects. Here are just a couple of suggestions to inspire you.
Biometrics is big business. As more and more services move online, the demand for secure authentication is increasing. Biometrics such as iris and facial scanners, fingerprints, and voice recognition are becoming the preferred way to verify identity. They’re used in transactions and for granting access to services. The biometric market size is around 36.6% and, it’s expected to surpass $68.6 billion by 2025. When you look at the number of payment apps, online banking solutions, and even online trading and investment sites, it’s clear that the demand is there. With a 13.4% CAGR over the next five years, the market has plenty of opportunities for entrepreneurs.
In particular, providing identity verification for regulated markets like payments, investments/trading, and iGaming has promising potential. This is due to increased demand from consumers. Increasing AML/CFT requirements mean that the inclusion of biometric identification into the onboarding and monitoring process can be invaluable for operators. There’s little doubt that biometrics is one of the leading fintech industries for investment right now and beyond.
Blockchain was once known for powering bitcoin. But in 2021, it’s known as a tool that is revolutionizing and disrupting multiple verticals. From investment banking to game fairness certifying and even the real estate market, blockchain technology is big and, it’s here to stay. The sector will likely top $137 billion by 2027, at a CAGR of 62.7%.
What’s more, is that almost 90% of senior executives believe blockchain will reach mainstream adoption with its compelling business case. Already, most of the world’s banks have either implemented or are in the process of exploring blockchain solutions. In fact, by the end of the year, a quarter of businesses will have invested more than $5 million in the technology. So what kind of solutions are in demand?
Ready to use blockchain infrastructures that can be easily customized are sought after, as are payment solutions that run on the blockchain. Additionally, programs that utilize smart contracts, or that can manage workflows, supply chains, and logistical matters are also increasing in popularity. If you can create or work with a system that provides accessible solutions to small to medium-sized businesses, then you are on to a winner. Furthermore, venture capitalists are interested in blockchain investments so funding can often be sought out from angel and other external investors.
We all know that the forex market is the largest and most liquid in the world, trading over $6 trillion every single day. But what about the sector in terms of online brokers and exchanges? Much of the daily trading volume is attributed to leading financial institutions like UBS, JP Morgan, and Deutsche Bank. But the situation is starting to shift.
During 2020, there was a big spike in the number of new forex trading accounts being opened. Some platforms reported increases of 300%. This was attributed to people having more time on their hands, a desire to make money, increased accessibility, and volatile markets. Figures from later in the year and early 2021 show that while some of the accounts are now dormant, many are still trading.
In terms of demographics, almost half are millennials and the majority of these prefer to use their phones to execute trades. They source their information from social media, courses, and by following current affairs. In terms of fintech industries for investment, the forex exchange sector is interesting as it holds a lot of future potentials. There is no danger of interest slowing down, and ongoing volatility is a big draw for new traders.
The online gambling sector has come on leaps and bounds since the mid-90s when the first online gambling licenses were issued. Today, it’s a dynamic industry with thousands of sites offering a range of different casinos, gambling, slots, and betting options. The fastest-growing categories within the market are mobile gambling, sports betting, live dealer games, and eSports. The latter came to prominence in the last year after the pandemic put a stop to many conventional sporting games. As a result, eSports betting made its transition to the mainstream, bringing with it a legion of new betting fans.
Cryptocurrency gambling is also increasing in popularity as bettors prefer the anonymity and convenience that crypto brings. More and more crypto casinos are springing up and existing sites are incorporating virtual currency into their payment options.
But don’t let the number of sites and platforms put you off, the market is far from saturated. The prevalence of smartphones has led to a new demographic of tech-savvy 18-35-year-olds becoming interested in gambling. For entrepreneurs with a bright idea and the right attitude, there are plenty of lucrative opportunities ready to be seized.
As you can see, most of the above fintech industries for investment involve having to make online financial transactions. This has led to a sharp increase in the need for smart electronic payment solutions. By 2027, the sector should be worth more than $37 billion, growing at almost 10% CAGR each year.
The pandemic provided yet another catalyst, accelerating the shift towards digital and contactless payments. It drove up the demand for eCommerce and online shopping solutions on a global scale, reaching a peak of $26.7 trillion by the end of 2020. With more people shopping online and likely to continue doing so, it was ePayments time to shine.
There is a lot of interest in payment solutions that integrate additional technologies such as blockchain and biometrics. AI is even being used to add additional layers of security and take care of compliance. Within the ePayments sector, mobile payments are particularly promising. Consumers want to be able to pay for everything in real life, and online using their phone. While cash is still king, entrepreneurs need to work to meet demands driven by an increasingly digital society.
Contact Fast Offshore
Fast Offshore are not experts in coding, creating new fintech products, or technology in the practical sense. What we are is experts in supporting businesses that do. We provide a portfolio of services to startups and established companies that work in a range of sectors. Company formation, tax, licensing, compliance, and opening a bank account, we can do it all. Fast Offshore can even take care of all the paperwork on an ongoing basis, leaving you to focus on your business. If you are thinking about key fintech industries for investment, make sure Fast Offshore is your first port of call. Contact us here.
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