Blockchain is a distributed and decentralized ledger that facilitates collaboration and trust within the members of the blockchain network. The blockchain technology provides secured sharing of information while making it transparent and immutable for all participants. Several commercial banks, investment banks, and insurance company’s roles in enforcing blockchain-based transactions are gradually increasing, thus making better business decisions, adhering to compliance requirements, lowering infrastructure and operational costs, and complying with regulations management.
MarketsandMarkets expects the global FinTech blockchain market to grow from USD 370.3 million in 2018 to USD 6,228.2 million by 2023, at a Compound Annual Growth Rate (CAGR) of 75.9% during the forecast period.
Various factors, including rapidly transforming financial and payment industry business processes; the rising high adoption of the FinTech blockchain technology for various application areas, such as payments, clearing, and settlement, exchanges and remittance, smart contracts, identity management, and compliance management/KYC; and the increasing venture funding and investments in the blockchain technology, would provide growth opportunities for blockchain technology vendors.
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The application segment includes payments, clearing and settlement, exchanges and remittance, smart contracts, identity management, compliance management/Know Your Customer (KYC), and others (cyber liability and content storage management). The compliance management/KYC segment is expected to be the fastest-growing segment in the FinTech blockchain market space. This growth is attributed to the fact that compliance management/KYC enhances organizations’ ability to resolve compliance issues, react to new compliances and regulatory obligations, and address the audit requirements. The blockchain technology can be successfully implemented for document management and record keeping of individual identities, therefore motivating companies and government agencies across the globe for adopting this technology.
The infrastructure and protocols providers segment is expected to account for the highest market shares in 2018. Infrastructure and protocols providers offer the infrastructure required to develop blockchain-based platforms with the help of middleware providers. These providers help enterprises implement the blockchain technology and develop solutions to fulfill the increasing need for customer services. Companies are adopting the blockchain technology, thereby enhancing the growth of this segment.
In terms of geographic coverage, the FinTech blockchain market has been segmented into 5 regions, namely, North America, Asia Pacific (APAC), Europe, the Middle East and Africa (MEA), and Latin America. North America is expected to account for the largest share of the overall market in 2018. This region is considered the most advanced region with regard to technology adoption and infrastructure. The wide presence of the key industry players of the blockchain technology solutions in this region is the main driving factor responsible for the growth of the FinTech blockchain market. Furthermore, APAC is expected to account for the highest growth rate during the forecast period, due to the increase in overall investments in the blockchain technology solutions to change business processes in the financial industry. The highly competitive environment in the region drives the need to promote and manage sales and marketing activities to build brand awareness and increase the overall profitability.
