A look at the future of fintech


  • Businesses and individuals are increasingly adopting financial technology (fintech) like digital payments, wallets, banking solutions, and financial management tools, which are driving more and faster transactions, greater access to capital, and financial wellness.
  • Fintech infrastructure and software solutions are playing a significant role in supporting broader fintech growth and optimizing how financial services companies operate.
  • In our view, investors seeking exposure to fintech investments may want to consider ETFs that target the range of fintech solutions, providing exposure to fintech stocks which could benefit from the category’s potential growth.


Digital everything

Digital payment and banking solutions, as well as personal finance tools, are revolutionizing how we transact and manage our finances, while solutions geared toward the financial sector are drastically enhancing how financial institutions operate.

Fintech’s impact extends beyond the financial system, serving as both a core component and catalyst of digitalization. E-commerce, the gig economy, consumer finance, retail investing, and countless other disruptive innovations can attribute their rapid and recent growth to the fintech enablers that power them.

Fintech investments can target a wide range of products and solutions

Digital Payments & Wallets

Payment solutions that enable the electronic exchange of money, usually over the internet, between businesses (B2B) , individuals (P2P), and businesses and consumers (B2P). Digital wallets store payment information, removing the need for physical wallets.

Fintech for Businesses

Software and platforms that optimize how businesses manage their finances, often through automation. Examples include spend management and accounting software, as well as payroll management solutions.

Digital Banking

End-to-end or specialized banking services delivered over the internet, including digital deposits, business and consumer lending, and mortgage and insurance services.

Fintech & Banking Infrastructure

Spans a wide range of products serving traditional financial institutions and fintech firms, enabling payment processing, account linking, data transfer and processing, and underlying processes for digital banking services.

Personal Finance & Investments

Tools that help users manage their finances, typically assisting or automating budgeting, saving, and financial planning. Also includes digital platforms that offer individuals and professionals the ability to buy, sell, and/or manage investments over the internet.

Enterprise Fintech

Software and platforms for financial institutions that streamline and/or automate operational and business processes. Examples include third party financial services software and regulatory and compliance applications.

Amid remote business operations and stay-at-home measures, the world embraced the full gamut of fintech services and solutions. To put this into perspective, the annual value of global digital transactions grew 33% in the first year of the pandemic.1 This adoption is not only still intact but is continuing to grow with transactions reaching $14.2 trillion at the end of 2022, 107% more than 2019’s pre-pandemic levels.2

While much of fintech’s growth is coming from its transformative impact in developed markets, an even larger piece of this growth, and a key area of future growth, is the formative nature of fintech for developing economies. From China to India to Eastern Europe and Africa, historical financial infrastructure is limited.  As a result, solutions such as mobile payments do not have, for example, checking or credit card infrastructure to displace; in these locales, financial infrastructure is built, or is being built, digitally to begin with.  This presents leapfrogging opportunities for emerging economies, as well as much needed solutions for the 1.7 billion people in the world without access to bank accounts, credit, and other essential financial services.3

With digital adoption set to continue around the world, from the transformative to the formative, we expect that future fintech could be more pervasive, benefitting related companies as a result.


Slim enough to fit comfortably inside your smartphone

Consumers and businesses are increasingly adopting digital payments and wallets as the primary way they pay each other. For consumers, the ability to pay digitally affords greater flexibility to make payments, no matter the time and setting, as well as the opportunity to dispute fraudulent charges. Consumers are embracing these benefits. In 2021, 82% of Americans reported using these technologies for browser-based or in-app online purchases, contactless in-store checkouts, and person-to-person (P2P) payments, up from 72% in 2016.4 And for businesses, digital payments mean access to more customers, increased revenues, and lower transaction costs. According to Visa, businesses that accept digital payments generate 17% more revenue and save 28% on digital transactions compared to cash ones.5

Though recent adoption is impressive, there is still room for significant growth within the category: 37% of global consumption expenditures are still paid through cash or check.6 With more transactions moving online every year, and new digital payment options like “buy now, pay later” (BNPL) seeing greater use, we expect that digital payments and wallets could capture additional market share, driving revenue growth for digital payment and wallet fintech companies. In fact, the total annual value of digital transactions is expected to grow 100% over the next five years, reaching $28.4 trillion in 2027.7

Digital transactions are expected to grow significantly across all major fintech verticals, illustrating greater adoption

Chart description: stacked column chart showing the annual total value of fintech transactions across major fintech verticals.

Note: Digital banking = alternative (digital) financing 8: lending, neobanking; digital investment = digital investment, digital assets.
Source: Statista, 2022.

Chart description: Stacked column chart showing the annual total value of fintech transactions across major fintech verticals. The chart shows how, moving forward, digital payments are expected to drive significant transaction dollars, while transactions related to digital banking and investments are expected to grow and gain share.


No more lines, no more deposit slips

Fintech innovators are driving significant disruption across the banking industry. Digital-only newcomers are challenging traditional banks for new business as incumbents struggle to modernize. These companies often offer end-to-end, a la carte, digital banking services with lower fees and simpler processes or specialize in a single services like business lending or insurance. Many customers of these firms prefer their user-friendly and specialized platforms as compared to the complexities of full-service banking providers who have been slow to adapt.

As a result, adoption of these technologies is surging. Digital banks’ share of primary banking relationships is up 80% since 2019, today representing 21% of all relationships.8 Moreover, 80% of people prefer online banking over visiting a brick-and-mortar establishment, while 59% of millennials will switch or have already switched to digital-only banking.9 Beyond capturing existing market share, digital banks can expand the reach of financial services to unserved populations. As a core fintech service, digital banking presents an opportunity to connect the unbanked to the global financial system and empower them financially.


So much more than memes

Fintech also includes solutions for managing personal and business finances. Individuals are increasingly looking to these tools to manage and grow their wealth, and to great effect. In 2021, the share of people’s money managed digitally in the U.S. jumped 10%, reaching 65%, while trades initiated by individual investors grew to 25% of all equity trading volumes, up from the 10-15% range experienced in the 2010s.10,11 Among those using these tools, 70% report greater overall confidence around their finances and approximately 90% plan on adopting additional products for saving, budgeting, and investing.12

Individuals are increasingly relying on fintech to improve financial wellness

Chart description: clustered column chart the share of Plaid survey respondents’ indicated reliance on financial technology for a range of functions.

Note: Survey conducted by Plaid from 7/6-7/20/2021, n = 2,000 US consumers; Some survey questions simplified for illustration, saving = "starting a savings habit, saving more of my money," budgeting ="making & sticking to a budget," borrowing/refinancing = "securing or refinancing a loan," general banking = "banking."

Source: Plaid, 2021.

Chart description: Clustered column chart the share of Plaid survey respondents’ indicated reliance on financial technology for a range of functions. The chart shows how fintech users are increasingly relying on fintech to provide key financial services


Do accountants dream of electronic software innovation?

Businesses are also using fintech to manage their finances. Innovative new offerings, driven by artificial intelligence and machine learning across spending management, accounting software and payroll management solutions are seeing heighted adoption as firms adapt to the virtualized nature of the post-pandemic world — a catalyst to be sure, but efficiencies and cost savings are the true drivers. That is why global business spending application sales, for example, are expected to reach $31 billion by 2029, growing at a 10.5% compound annual growth rate (CAGR) over the coming years, while accounting software sales are expected to reach $70 billion by 2030, growing at a 20% CAGR.13,14


The picks and shovels for an entirely different kind of gold rush

Many point to the transatlantic cable as the first true instance of transformative fintech — enabling the first electronic fund transfer and making it possible to transact over long distances.15 Beyond the products and services that are disrupting how consumers and businesses interact with money, today’s fintech innovations include less visible, but equally powerful, technologies rewiring and optimizing global financial systems. Digital banks, payments, and platforms that provide investment, insurance, and consumer finance services require significant infrastructure to operate, relying on systems and applications that can dependably process and handle transactions and customer data.

Payment processing platforms, for example, are essential to ensuring successful digital transactions. They connect payments companies to check clearing and settlement systems and offer the ability to track money movement in real time. Equally important, data transfer networks make it possible to directly connect to customers’ bank accounts and are vital to processing and transmitting consumer data. Finally, a variety of solutions can use this data to deliver vital supporting functions like fraud prevention, risk management and underwriting. With digital payment and banking services expected to grow in the coming years, we believe fintech companies that provide the infrastructure solutions underpinning these services could experience significant revenue growth in turn.


To boldly go where no financial institution has gone before

Enterprise fintech software is rapidly becoming a key priority for financial firms. Legacy IT systems are extremely costly to maintain and present meaningful risk, while new systems are expensive to implement and subject to future obsolescence. Enterprise fintech, or outsourced fintech solutions, can address this without subjecting companies to either option. For example, zero-code software platforms, which allow companies to integrate financial software without the need for their own coding, can deliver complex custom applications and systems for financial companies that can be easily deployed and integrated. The outsourced fintech software is forecasted to grow by 24 billion at a 9% CAGR from 2023 to 2027, with North America expected to account for 35% of the market growth.16

IT spending among banks is expected to grow significantly. Enterprise fintech solutions could capture much of this market

Chart description: Column chart showing expected annual IT spending among US banks in billions of dollars. The chart shows the significant market size enterprise fintech solutions could capture through disruption.

Source: Insider Intelligence, March 2022.

Chart description: Column chart showing expected annual IT spending among US banks in billions of dollars. The chart shows the significant market size enterprise fintech solutions could capture through disruption.

Regtech, or regulatory technology, is a particularly fast-growing enterprise fintech vertical. It encompasses solutions that improve or automate regulatory and compliance processes. Operating in one of the most regulated industries, financial firms dedicate significant time and resources to fulfill their regulatory obligations. As a result, errors can lead to financially damaging penalties. Regtech offers an effective means of mitigating this risk and is fast becoming a key priority for financial operators — but is only one of the many examples in which fintech is helping financial services players streamline processes while simultaneously reducing costs and risk.


Investors looking for exposure to fintech via public equities may want to consider ETFs that invest in fintech companies across the full spectrum of fintech solutions.

The breadth and scale of fintech makes it unique as a theme. The sub-themes in this paper — from payments to banking to enterprise fintech — have truly different players, not to mention barriers to entry, technology, and regulatory regimes. Moreover, these sub-themes themselves are multifaceted: for example, personal finance solutions encompass accounting, investing and budgeting, each of which has a range of diversified and specialized fintech innovators. So, we believe investors may want to consider investments that can rotate across fintech sub-themes, add new ones, and seek to uncover not just disruptors but also the nimbler, better-prepared incumbents who are positioned to have the greatest growth potential amidst the overall theme’s rise.


We expect fintech to become increasingly important as the boundaries of the digital and physical worlds blur further. Fintech offers the ability to move seamlessly between these worlds by unifying our digital and physical wallets and identities, facilitating commerce and economic activity. We expect this potential to translate to immense revenues for fintech stocks — the global fintech market is expected to reach $556.6 billion by 2030, representing a 20% CAGR from 2022’s $133.8 billion market.17 Therefore, investors looking for opportunities in fintech may want to consider ETFs that provide exposure across the fintech value chain.

Jeff Spiegel

Jeff Spiegel

Head of U.S. iShares Megatrend and International ETFs

Mariah Ward

Megatrend Strategist


Kevin Li

Megatrend Strategist