According to Fortune Business Insights, the global fintech market is estimated to be worth $882 billion in 2030, signaling a compound annual growth rate (CAGR) of 17% between 2023 and 2030. That sets the stage well for high-growth fintech companies, such as SoFi (NASDAQ:SOFI). During the fourth quarter, SoFi reported adjusted revenue growth of 34% to $594 million. At the same time, shares of SOFI stock are down by nearly 30% in 2024.
Fortune added that the Covid-19 pandemic acted as a major tailwind for the adoption and use of digital financial services.
“Moreover, the economic impact of the pandemic led to an increased demand for lending and credit services. These companies offering digital lending platforms and credit scoring solutions saw growth in this period,” said the research firm.
SOFI Stock Is in the Midst of a $882 BILLION Market
According to Fortune, fintech companies that utilize artificial intelligence (AI) and cloud computing will have an advantage over their peers. AI can help customers make smarter and safer financial decisions, while cloud computing allows for flexible infrastructure development based on activity and demand.
Fortune separates the fintech market by technology into four segments: AI, blockchain, robotic process automation (RPA) and others. AI is expected to grow at the fastest rate by 2030, while blockchain technology had the highest market share in 2022. SoFi discontinued its cryptocurrency services last year due to regulatory concerns.
North America commands the largest fintech market in the world, which was worth an estimated $89.61 billion in 2022. That’s a positive for SoFi, as most of its customers are located there. Meanwhile, the Asia Pacific region is expected to grow its CAGR at the fastest rate in the world by 2030. SoFi does not provide direct services in Asia, although customers can use their debit cards there.
The message here is very clear. The fintech market is set to grow at a high rate due to the proliferation of technology. However, it’s up to SoFi to capitalize on its opportunity by taking market share. That’s easier said than done.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
