Fintech Outlook 2024 (Portage)

Summary

• AI deals captured more than US$40 billion in venture capital funding in 2023, with generative AI expected to become embedded across fintech verticals.p.3
• Funding dynamics shifted strongly toward B2B fintechs, which raised $1.90 for every dollar raised by B2C fintechs in 2023, up from $0.90 before 2021.p.6
• The wealth and asset management sector faces the transfer of an estimated US$68 trillion in assets from baby boomers to Millennials.p.9
• The transaction value processed across instant payments rails is projected to increase by +280% through 2030.p.12
• Anti-money laundering enforcement intensified in 2023, resulting in US$5.8 billion in total AML fines across the cryptocurrency industry.p.13

Key insights

1. Venture capital funding for AI reached more than US$40 billion in 2023 as foundational models create new opportunities in fintech.p.3
2. Consumer tech investing accounted for only 7% of overall seed capital raised in 2023.p.4
3. Small and medium-sized businesses accounted for 44% of U.S. GDP in 2023, accelerating demand for embedded credit and SaaS-linked finance.p.6
4. Payments value chain commoditization is compressing margins, forcing SaaS providers to verticalize embedded payments.p.11
5. Crypto industry AML penalties totaled US$5.8 billion in 2023, highlighting an urgent need for automated compliance monitoring tools.p.13