Financial service providers benefit from large global fintechs as well as startups.
The role of fintechs
While the names of the vendors have changed, the impact fintechs have, both large and small, in shaping how we learn, transact and plan our financial journeys has not.
Today’s customers are looking for many things when it comes to their financial relationships. First and foremost is that they generally will start their process by doing their research online, whether it’s to compare rates, products, locations or reviews, they want to know the information ahead of time before taking things to the next level.
Let’s look specifically at the banking industry. Consumers are savvy, and will be loyal if their expectations, both digitally and through employees, is being met. That often starts right at the point of beginning a new relationship, and the importance of engaging a customer where they are, on any device, with relevant and personalized offers and messages. To do this, often times banks will look towards their core provider, an enterprise platform solution, or specialized vendors to develop solutions. Large institutions may choose to build their own, but will often augment areas with prebuilt components in order to improve speed to market.
IDC 2025 FinTech Rankings
IDC Financial Insights has been conducting its IDC FinTech Rankings research for over two decades. The research is a quantitative “state of the industry” measurement for financial services– and fintech-based revenue earned by the top 150 technology firms globally. The financial services industry is made up of banking, insurance, capital markets, and fintech firms that buy hardware, software, and services from third-party IT providers. Two major categories of IT companies are ranked:
- IDC FinTech Top 100: Solution providers that derive more than one-third of their revenue from the financial services and fintech industries and across no more than two additional key non-FSI industry verticals
- IDC FinTech Enterprise Top 50: Solution providers that support four or more key industries yet have sufficient revenue from the financial services and fintech industries to be ranked
When one looks at the amount of budget earmarked for technology spend, again in hardware, software and services (not employees), IDC estimates that annually over USD 550 billion is spent by banks, capital market and insurance providers. To put that in perspective, that would make the IT spend by FSI equivalent to being one of the largest 25 in the world by nominal GDP, equivalent in size of the economy of Ireland.
Of the 150 companies ranked in the IDC FinTech Rankings, they comprise nearly 60% of the market share of IT spending by financial services, which still leaves significant market share remaining for the 1000’s of additional fintech providers.
Finovate Fall themes and messages
As in year’s past, I have had the opportunity to see what the next generation of fintech providers are working on at the Finovate event in New York City. It was great to see so many exciting solutions spanning the banking and wealth management industries. While these fintechs only had a few minutes, seven to be exact, to demonstrate their solution, there were some themes that seemed to resonate with the solutions demonstrated.
First, the importance of customer experience remains a key component of the demonstrated solutions, but glad to see that the importance of employee experiences has equaled in importance. The reality is that the industry has neglected the solutions supporting our employees, and often times they are being asked to support customers who are using modern technology with outdated interfaces and disparate platforms. Single sign in has been helpful, but there is much that needs to be done.
Second, and to nobodies surprise is leveraging AI to automate and create efficiencies. Our research would agree that the primary benefit of AI is to create efficiencies out of inefficient processes, but this does not always necessarily mean that it will automate a process. For example, using AI to begin a fraudulent transaction makes sense to gather as much information as possible, yet we are not ready to have AI actually execute the steps necessary to either disable a card or issue a refund. There still needs to be a human on the loop, whether it is the customer or the bank employee.
And finally, there were solutions pitched that focused on identify management and improving security, particularly focused on money movement and maintaining compliance with existing and future regulatory requirements. The idea, which is more refinement than innovation, is to embed fraud prevention within the solution, but ensure that the forensics are available to detect and deter actions by bad actors.
