Financial sector of technology, boosting profits and accessibility, as growth firms up
The Shift Towards Sustainable Fintech Growth: Highlights from the World Economic Forum's Annual Meeting
The 16th Annual Meeting of the New Champions, organised by the World Economic Forum, will take place from 24 to 26 June in Tianjin, China. This year's event, themed "Entrepreneurship for a New Era", will convene over 1,700 leaders from various sectors to discuss and explore entrepreneurial solutions to global challenges.
One of the key areas of focus will be the fintech sector, which is showing strong, sustainable growth. According to the report "The Future of Global Fintech: From Rapid Expansion to Sustainable Growth", fintech firms have stabilised their customer growth at 37%, and are expanding financial access to traditionally underserved market segments, such as micro, small and medium enterprises, low-income individuals, and women.
The report highlights several key findings related to fintech's role in serving traditionally underserved groups, AI adoption, the regulatory environment, and partnerships with traditional financial institutions.
Serving Traditionally Underserved Groups
Around 1.4 billion people still lack formal banking access, but fintech is rapidly expanding access through human-centric, culturally aware, and user-friendly platforms that foster trust and long-term engagement among previously excluded populations. Financial inclusion has significantly increased, with 75% of adults in low- and middle-income economies now having financial accounts, aided largely by mobile and internet technologies especially in rural and remote areas.
Efforts emphasize embedding financial literacy and education within fintech platforms to empower users to make informed decisions rather than just providing access. The gender gap in account ownership is narrowing, now down to 5% from 9% a decade ago, showing progress in financial inclusion for women.
AI Adoption in Fintech
Artificial intelligence (AI) is a key enabler for expanding access via applications like alternative credit scoring, which uses unstructured data to assess creditworthiness for people without traditional collateral or credit history. AI also supports product innovation, such as inclusive insurance that improves customer acquisition, pricing, claims management, and fraud detection, thus broadening consumer choice and services.
While AI use offers huge potential given the mobile phone penetration among the unbanked, there is caution around algorithmic bias and the need for responsible use.
Regulatory Environment
The need to maintain global security standards alongside culturally appropriate design highlights an ongoing regulatory balancing act to ensure trust and safeguard users. Fintech expansion demands regulatory frameworks that support innovation while protecting consumers, particularly in underserved regions where digital literacy and infrastructure vary significantly.
Partnerships with Traditional Financial Institutions
The role of partnerships between fintech companies and traditional financial institutions is implied, especially for bridging gaps in access and trust by leveraging each other's strengths. Traditional institutions can extend their reach through fintech-enabled channels, and fintech benefits from established regulatory compliance and trust frameworks. These collaborations are essential to scale financially inclusive solutions sustainably.
The report covers digital lending, digital capital raising, digital payments, digital banking and savings, insurtech, and wealthtech. Financial performance remains strong with revenue growth at 40% and profit growth at 39%. However, fintechs' concerns on macroeconomic conditions and funding environment have eased but still linger on.
The meeting will explore entrepreneurial solutions to global challenges, with a focus on financing, insurance, investment, inequality, gender, women, innovation, and fintech. The report was surveyed among 240 fintech companies in six key retail-facing fintech business verticals and six regions: Asia-Pacific, Europe, Latin America and the Caribbean, Middle East and North Africa, the US and Canada, and sub-Saharan Africa.
[1] World Economic Forum. (2021). The Future of Global Fintech: From Rapid Expansion to Sustainable Growth. Retrieved from https://www.weforum.org/reports/the-future-of-global-fintech-from-rapid-expansion-to-sustainable-growth [2] World Economic Forum. (2021). The Future of Global Fintech: From Rapid Expansion to Sustainable Growth - Executive Summary. Retrieved from https://www.weforum.org/reports/the-future-of-global-fintech-from-rapid-expansion-to-sustainable-growth-executive-summary [3] World Bank Group. (2017). Findex Youth 2017: Financial Inclusion Metrics for Young Adults Aged 15 to 24. Retrieved from https://www.worldbank.org/en/publication/findex-youth-2017-financial-inclusion-metrics-for-young-adults-aged-15-to-24 [4] World Economic Forum. (2019). The Global Gender Gap Report 2019. Retrieved from https://www3.weforum.org/docs/WEF_GGGR_2019.pdf
- The meeting will delve into business solutions for global challenges, specifically discussing the role of technology in finance, such as the expanding use of artificial intelligence for credit scoring and insurance, and the importance of partnerships between fintech companies and traditional financial institutions to achieve sustainable growth in the finance sector.
- Some of the key findings from the World Economic Forum's report, "The Future of Global Fintech: From Rapid Expansion to Sustainable Growth," include the role of fintech in serving traditionally underserved groups, the adoption of AI, the regulatory environment, and the benefits of partnerships between fintech companies and traditional financial institutions.
