50% of Fintech Companies in the World Believe that the Regulatory Environment is Favorable

In a report presented today by the World Economic Forum , during its main event in Davos, the strength and resilience of fintech companies was highlighted, as they continue to expand their services despite the uncertain economic outlook .

The report, titled “The Future of Global Fintech: Towards Resilient and Inclusive Growth,” developed in collaboration with the Cambridge Center for Alternative Finance, is based on a global survey of more than 200 fintech companies across five business verticals. retail trade and six geographic regions.

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Although most fintech companies are experiencing solid growth, the report also highlights challenges

“The study reveals that dynamic hubs such as Singapore, the UK, the US and India have hosted a burgeoning cluster of corporate headquarters for fintech companies. Furthermore, among the countries surveyed, the most important for fintech companies are the US .US, UK, Singapore, Mexico and India,” the report says.

One of the positive aspects noted in the report is the optimistic view that most fintech companies have about their regulatory environment, with 63% rating it as adequate. In addition, 38% of the companies surveyed consider that the regulatory environment is an important supporting factor for their operations and growth.

Although most fintech companies are experiencing solid growth, the report also highlights challenges, especially in terms of regulatory compliance. Despite the fact that 63% view their regulatory environment positively, a significant portion face obstacles in the licensing and registration processes, indicating areas that could be improved by policymakers and regulators.

In the case of Latin America and the Caribbean, the main challenge to scale these services is financial education, followed by socio-cultural aspects , while when analyzing the main factors that hinder the growth of the sector, the regulatory environment is the main aspect highlighted. .

Drew Propson, Director of Financial Services Technology and Innovation at the World Economic Forum, expressed optimism, noting that fintech performance remains strong following the Covid-19 pandemic . However, he highlighted the importance of overcoming obstacles such as a challenging macroeconomic climate and a decline in fintech funding.

A notable finding of the report is that many fintech companies are actively expanding service delivery to traditionally underserved segments of the population

These segments represent a considerable proportion of your customer base and total transaction value. Although the majority of these fintechs are located in emerging markets and developing economies, companies in both advanced and developing economies have a significant proportion of their customer base coming from these groups .

The report also provides practical recommendations to decision makers, highlighting the importance of working collectively to streamline compliance processes , improve consumer education and increase trust in the financial system. Bryan Zhang, CEO and co-founder of the Cambridge Center for Alternative Finance, highlighted the need for an appropriate regulatory environment that encourages the scalable and sustainable development of the fintech industry.

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(Featured image by andibreit via Pixabay)

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First published in LR LA REPUBLICA, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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