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AI’s Impact on Financial Services: A 2025 Perspective

The integration of AI into financial services has led to significant shifts in the workforce:

• McKinsey estimates up to 800 million jobs could be displaced by automation in the next few years.
• The World Economic Forum says AI could replace 85 million jobs globally by the end of 2025 – but also create 97 million new ones for those with the right skills.
• Junior roles in investment banks are being automated in real-time, pushing teams to reskill or risk redundancy.
• And across the board, firms are urgently hiring for AI fluency, tech literacy, and strategic thinking.

The message is clear: To remain relevant in the financial sector, developing AI competencies is essential.

But how do you know if you’re AI-ready?

It’s hard to assess yourself. Most of us either overestimate our skills… or completely overlook what we don’t know.

That’s why we created AIQ – the AI Skills Assessment. This is a comprehensive tool designed to evaluate your preparedness across five key pillars:

1. AI Fundamental: How strong is your understanding of AI concepts, models and data mechanics? This is the base layer of AI literacy.
2. AI Implementation: From deploying tools to prompt engineering, this measures how well you can apply AI in your work.
3. AI Governance: Do you understand ethical risks, bias, security and compliance in AI systems? This pillar covers responsible AI usage.
4. Strategic Thinking: AI isn’t just technical – it’s strategic. Can you use AI insights to make better business decisions and guide your team?
5. Human-AI Collaboration: This focuses on how well you work with AI: adapting to emerging trends, using AI tools, and thinking beyond automation.

This is your moment to act

Whether you’re in product, operations, risk or marketing – your ability to work with AI could define your next promotion, project or pivot.

Ready? Take the assessment now – free for early testers.

The post AI Fluency Is the New Must-Have. Test Yours. appeared first on CFTE.

eFinancialCareers, in partnership with CFTE will examine how AI is transforming the workforce. As AI continues to evolve, it is crucial to understand its impact and take proactive steps to prepare for the future. This discussion will focus on how businesses and employees can adapt to an AI-driven workplace. By watching the webinar, you will understand:

By watching the webinar, you will understand:

• The changing job market in the age of AI
• AI’s impact on hiring & skills
• AI & compensation trends
• Predictions for 2025 & beyond

Your speakers are:

• Pete Healey, CEO of eFinancialCareers
• Huy Nguyen Trieu, Co-Founder of CFTE, Author of “The Ai-fication of Jobs”

The post The AI-fication of Jobs: Preparing Ourselves for the Future of Work and Talent Webinar appeared first on CFTE.

Traditionally, fintech unicorns made rare sightings across the globe, but it’s becoming a common breed in today’s fintech ecosystem – with nearly 157 fintech unicorns in the world. The new generation of unicorns are disrupting finance as we know it, with modern technologies and innovative business models attracting swathes of new-age consumers. At CFTE, we decided to dive into the rankings of the largest fintech unicorns (public and private companies valued at $1 billion and those that surpass it) and trace back their origins.  

A geographical representation of the 157 Fintech Unicorns in 2021

What are Fintech Unicorns?

Unicorns are late-stage startups that have a valuation of more than $1bn, and are either private or have gone through an IPO. In our definition, these are private startups that go from $1bn to listed companies such as Paypal (the granddaddy of Fintech).

Based on our ranking of the largest fintech companies in the world by market capitalisation, there are nearly 157 fintech companies in the billion-dollar club worldwide, valued at a total of $1.8 trillion.

The countries with the most Fintech Unicorns in the world

Fig 1. Number of Fintech Unicorns Per Country, 2021

More than half (51%) of the world’s soaring fintechs come from the United States. The countries next in rank on the leaderboard don’t even match up to the US’s scale of fintechs valued over a billion dollars. To put this in perspective, the USA has more fintech unicorns than all other countries combined. The USA is home to some of the most valuable private and listed fintech companies by market capitalisation including, Paypal ($327.76 bn), Square ($128.26 bn), Stripe ($$95 bn), Coinbase ($54.22 bn), and Robinhood (​​$47.83 bn).

China trails with 11 Fintech unicorns (the USA has nearly 7 times more). But China holds pride in harboring one of the most valuable fintech giants, Ant Financial worth approximately $312 Billion as of August 2021. Other Chinese fintechs that have become some of the most valuable behemoths include Tencent (Fintech business) ($120 Billion), Lufax ($17.53 Billion), Zhong An ($7.96 Billion).

The United Kingdom and India, don’t fall far behind the mainland with 10 and 9 fintech unicorns leading the countries’ fintech hubs. With a fraction of the difference between the countries, the competition between China, UK, and India to lead the race with the most fintech unicorns is getting heated up.

To deep dive further into the numbers, an analysis on the countries which host at least 1 or more fintech Decacorns – companies valued at over $10 billion – revealed some interesting numbers (Fig 2.). While the USA, China and take the lead again it’s remarkable to see the UK in line with an emerging economy like Brazil with 2 fintech decacorns. This is a clear indication that Brazil’s Fintech ecosystem is gearing up for some big swings in the industry.

Fig 2. Number of Fintech Decacorns Per Country, 2021

The secret behind the billion-dollar fintech marketplaces

Fintechs that hit the $1 billion mark are mainly clustered in the top 4 countries (USA, China, UK, India), while the rest of the world still plays catchup. Innovation in Fintech is undoubtedly predominant beyond the borders of the leading countries, but the strategy to nurturing billionaire fintechs needs a lot more to materialise. 

Deloitte states that, for a country to rise up the ranks as a hub to some of the leading fintech unicorns, there are usually 4 main criteria that come into play.

First, the ability to attract, develop and retain talent in areas of finance, technology, and entrepreneurship is key to a FinTech hub’s global competitiveness.

Another element to consider is access to capital. Start-ups will flock towards places they can get seed and scale capital to grow their business, whether it comes from public or private funding.

In addition to funding privileges, just like any other industry, more demand brings in more supply. Certain countries with a more established fintech market may have an advantage here with more demand from direct customers (B2C) or businesses (B2B).

And finally, another key factor that contributes to a country’s fintech thriving unicorn ecosystem is policy and regulation. Governments and regulators need to have the perfect balancing act between encouraging innovation, promoting competition, and consumer protection that creates the ideal breeding ground for fintech startups.

The USA leads undefeated with a robust fintech landscape 

The United States has managed to top the charts, undefeated by its arch-rival China – a notable achievement in the financial technology space.

North America’s continued addition to fintech unicorns is driven by the extensive funding the sector has seen in the region. The number of VC deals in 2021, continued to skyrocket in Q2 2021 as compared to deals falling in Asia and Europe (Fig 3.).

Looking into the sector at a microscale, we see the main fintech unicorns populating the US ecosystem come primarily from sub-sectors like Insurance, Lending, Payments, Investing, Cryptocurrencies.

Some new additions to the Fintech billion-dollar family since 2020 include the blockchain startup, Ripple Labs which helps financial institutions send money across borders instantly, reliably, and cost-effectively. Another newly turned fintech unicorn is BlockFi​​, which fashions itself as a crypto wealth manager, has grown significantly with ​​monthly revenues jumping from $1 million to more than $45 million.

Fig 3. Quarterly Fintech VC deals by continent, Q2’20 – Q2’21, CB Insights

China stands second on the ‘Fintech Billion’ leaderboard, but could risk falling behind with regulatory pushback

China undoubtedly has one of the most vibrant fintech ecosystems. Leading firms like Ant Group and WeChat Pay (Part of Tencent) have valuations that dwarf their global peers. The market cap average of fintech in the billion-dollar club is $43 billion, while the USA stands at approximately $11 billion.

The Chinese fintech ecosystem is mainly driven by China’s tech giants – Alibaba and Tencent – that stepped in, making financial services more accessible to everyone.

Syed Musheer Ahmed, Founder & MD of FinStep Asia, highlighted in an interview with CFTE, that the stratospheric growth witnessed by these behemoths can be attributed to the lower regulatory boundaries that existed at the time these companies entered the market, allowing the fintechs created by these big techs to grow untethered.

However, with regulatory watchdogs reining in on these tech giants, investors are now shifting their focus from the region’s fintech giants and focusing on a new generation of upstarts in the industry. But the Chinese Fintech industry also now risks losing investments to the neighboring Indian economy, whose tech startups are poised for fintech growth. 

UK – Europe’s fintech prodigy

The UK deserves its place among the top 3 countries to have nested the most fintech unicorns. The country has built up the hottest fintech ecosystem in Europe primarily owing to the nurturing regulatory environment that has created the perfect hub that encourages large fintech raises as well as causes leading unicorns to multiply. 

A prominent feature of the British fintech scene is that it ranks number 1 in open banking adoption in Europe giving fintechs standardized access to a wealth of user bank account data, which helps develop their services and attract investors. 

The region’s regulator, the Financial Conduct Authority (FCA) has also been conducive to fintech growth. It has been accommodative of industry changes, an example of this was seen when it extended the anti-money laundering requirements deadline for crypto trading.

As a result of a combination of these factors, business insider states that the fintech sectors unicorns constituted the largest chunk of tech unicorns in total (34%).

India rises to the top fintech hubs as it adds 4 new fintech unicorns in 2021 alone

India’s fintech companies are poised to become three times as valuable in the next five years and are predicted to reach a valuation of $150-160 billion by 2025, according to a report by BCG and Ficci.

The countries success is riding on strong demand, an enabling regulatory environment, a growing pool of tech talent, and a booming investment ecosystem.

India’s dynamic fintech landscape has seen innovations spurring in the last few years with nearly 67% of all fintechs in the country being established in the last 5 years alone. The main areas of growth in fintech billionaires have been payments and transactions as well as insurance.

India’s largest fintech today is Paytm with a current valuation of $25 billion, and there are several promising startups following its lead. In 2021, out of India’s unicorns, 40% were from the fintech sector. Those who recently entered the billion-dollar league include CRED, who following its Series D funding round of $215 million, saw its valuation almost triple from $800 million to $2.2 billion. Digit Insurance, ChargeBee, and Groww were other rapidly accelerating fintech startups that ramped up their valuations in 2021.

Where can we expect future unicorns to come from?

Looking into the future of fintech we may see some reshuffling of the top fintech unicorn hubs on the leaderboard. As countries realise the economic benefits of a burgeoning fintech sector, they are building a healthy ecosystem with regulations that help promote further innovation. As we dive into the fintech rankings to find the next hidden gem, there are 2 main countries that popped up on the radar – Brazil and Malaysia. 

Brazil, the second-largest fintech hub in Latin Amria is home to nearly 380 fintech companies. The country could be home to the soon to arrive fintech unicorns. The fintech ecosystem in Brazil seems ripe for innovation as the Central Bank of Brazil works towards boosting market competition and increasing the scope for financial education. It also recently began the implementation of open banking at the beginning of 2021, which could be conducive to the growth of several fintechs.

On the other side of the world, Malaysia’s largely unbanked and underbanked population also makes it the perfect place for fintech opportunities. A key catalyst for fintech growth in the country is the high rates of smartphone penetration. Around ​​40% of the country’s fintech sector currently comprises of digital payments and mobile wallet companies.

As these emerging fintech hubs buckle up to refine their strategy it will be interesting to see who pushes forward to give birth to the next breed of fintech unicorns.  

The post The Fintech Unicorn Hubs of 2021: Where Do the Largest Fintechs Hail From? appeared first on CFTE.

Investors are buckling up for what is the most anticipated Initial Public Offering (IPO) – Robinhood Markets Inc. The upstart submitted an S-1 registration form to the Securities and Exchange Commission (SEC) on July 1, 2021. The company had previously filed a confidential IPO on March 23, 2021. In the filing, Robinhood did not disclose the expected IPO date, price range, share count, and total valuation of its IPO.

Here Are The Main Takeaways from Robinhood’s IPO Filing

• Robinhood plans to raise $100 million as it begins trading on the Nasdaq
• Robinhood is also setting aside a chunk of their Class A shares, as much as 35% for investors on their own platform
• The company’s shares will be trading under the ticker symbol: HOOD
• 81% of Robinhood’s revenue comes from payment for order flows (PFOF)
• Cryptocurrencies represented 20.8% of transactional revenue (a big jump from just 4.4% in the previous year)
• Robinhood says dogecoin accounted for 34% of its crypto-trading revenue in the 1st quarter of 2021, and lists declining interest as a risk

What Does Robinhood Do?

Robinhood, the app famously known for its green quill logo is an online brokerage fintech touted as a tool to ‘democratize finance for all’. The app offers trading and investing services with an attractive ‘zero-commission trade’ proposition that has riled up a new generation of young investors.

Founded in 2013 by Stanford students, Vlad Tenev and Baiju Bhatt, the trading app was created to make buying and selling of equities easy with a gamified trading interface.

“Robinhood created a really great user and customer experience for millennials to invest with,” said Kelly Rodriques, chief executive of pre-IPO marketplace Forge in a statement to Forbes. “There is a whole generation of investors that are participating in the markets that weren’t there before.”

The app very recently exploded in popularity after the COVID-19 pandemic caused people to stay home coupled with a cut on luxury spending – giving people just the right amount of spare cash they need to get investing. It was also the broker of choice for meme-driven investors on Reddit’s r/WallStreetBets, the online forum that sparked the trading frenzy of GameStop, joke cryptocurrencies, and other meme stocks.

Though the company has been swinging in and out of controversies, Robinhood’s rise has been noteworthy. From the date of its founding up until 2020, the platform gained 13 million users. On top of that, it added another remarkable 6 million users in just the first two months of 2021!

Is Robinhood Profitable? Let’s take a look at their Financials

A quick glance at the numbers that matter in Robinhood’s Financials:

• Revenue: In 2020 it generated $959 million in revenue (up 245% from 2019), with $522.2 million revenue generated for Q1 of 2021.

• Net income: In 2020, Robonhood generated a net income of $7 million (versus $106.6 million in loss in 2019).

• Net Loss: Robinhood’s Q1 net losses rose to $1.4 billion in Q1 2021 from $52.5 million in Q1 2020.

• Net Cumulative Funded Accounts: The accounts, one into which users made deposits or money transfer during a specific period stand at  18 million in Q1 2021 (a 150.0% YOY increase).

• Assets Under Custody: As of March 31 2021 AUC stand at $80.9 billion.

• Transaction Revenue Breakup: As of March 31 2021, Cryptocurrencies represented 20.8% (big growth area from just 4.4% in the previous year), Equities stood at 31.7%. And Options made up 47.1%.

How does Robinhood Make Money?

Robinhood’s primary means to mint cash is based on a somewhat controversial practice of payment for order flows (PFOF). What this means is that the brokerage Fintech makes money by selling customer trades to market makers like Citadel Securities, who promise the firm to execute the trade at, or better than, current market prices. Approximately 81% of Robinhood’s transaction based revenues were generated from PFOF.

The payment for order flow is a practice that helps the booming fintech offer commission-free trading. The UK and Canada forbid this kind of practice, while the US Securities and Exchange Commission is still reviewing it.

The rest of their revenue, about 12% flows in from interest earned from margins and securities lending and 8% of their income stream is contributed to by Robinhood’s monthly premium subscription (Robinhood Gold) along with ACATS fees charged to users when they transfer their holding and other fees.

What’s interesting to see in the revenue growth of Robinhood is the key growth points in income flow coincide with some big market movements. According to Vested (2021), you can identify 3 major phases. Phase 1 in 2019 is relatively flat. Phase 2, which falls between Q1 and Q2 2020, saw a 91% jump in revenue which could be driven by increased trading amidst global lockdowns. And finally, in Phase 3 or rather Q1 2021, revenue shoots up again with the rise of meme stocks. Robinhood clearly stated in its IPO that 34% of its cryptocurrency trading revenues came from dogecoin in the first quarter of 2021 and listed the declining popularity of this joke coin as a risk.

Source: Vested (2021)

Should You Invest In Robinhood’s IPO?

While we may not have the perfect answer for you set in stone, we would like to float some facts that should nudge you to make a choice that works best. It’s important to keep Robinhood’s whole story in mind. Contrary to a popular belief, the GameStop frenzy is not what made Robinhood what it is today. Though the company has dipped its toes in several regulatory troubles, like the recent case of the Financial Industry Regulatory Authority (FINRA) charging Robinhood $70 million, it is a scenario not uncommon for a growing behemoth like itself. Robinhood has managed to build a powerful brand despite the negative headlines hitting the papers. The company had nearly 80% of new accounts coming from customer referrals and holds nearly half of all new retail accounts opened in the U.S. from 2016 to 2021, as stated by Market Watch.

It’s also important to keep in mind that the competitive landscape is not cut out for a monopolistic institution. Competition is fierce, with Charles Schwab recently acquiring TD Ameritrad, Morgan Stanley buying E-Trade and Chinese-owned investing app WeBull, who is planning to take a shot at replicating Robinhood’s approach.

Robinhood also has a lot of potential to grow with its land and expand strategy. It has managed to land a consumer demographic just starting out in their financial lives and they continue to grow and demand more products it could create larger revenue streams.

But a big part of Robinhood justifying its hearty valuation is that it needs to keep at its much larger growth – more than its current userbase. This may be difficult if the highly volatile stock market falters. Most new investors have only seen the sunny side of the market with the current bull run, but when things get stormy, could a company like Robinhood take the hit? The company may have failed to prove how it will deal with this eventuality which may cause the prudent investor to minimize exposure to it.

At the end of the day, the pros and cons lie in front of us and it all comes down to, how much risk are you willing to take? Do the gleaming benefits outshine the risk? Do you believe in the company’s growth strategy?

But, only time will tell how the IPO eventually turns out! So keep an eye out for the HOOD ticker symbol.

The post The Robinhood IPO: Everything You Need To Know appeared first on CFTE.

Its easy to assume that with the world’s digital financial services advancements that everyone today has a bank account. But this is far from the truth. According to the World Bank’s latest report nearly 1.7 billion people are unbanked globally. That’s close to to one forth of the global population. But what does this mean? Being underbanked means is that this sect of adult population does not use banks or banking institutions in any capacity.

A recent study by the British research platform Merchant Machine revealed that Morocco, Vietnam, Egypt, Philippines and Mexico top the list of the most unbanked countries in the world with more than 60% of their population unbanked.  A global comparison by Global Finance (2021) saw that in the Middle East and Africa 50% of the population is financially excluded, with South and Central America nearing 38%, Eastern Europe at 33% and Asia Pacific at 24%. While these are significantly large portions of the population that are financially excluded, the world’s most developed regions are still not perfect role models – the proportion of financially excluded reaches about 21% in North America.

Source: Global Finance and Merchant Machine, 2021

However, there is no doubt there is a widening disparity between the world’s developed and developing countries. According to the United Nation’s Financing for Sustainable Development Report 2021, developed countries have 94% of adults with a bank account, while in developing countries that figure plumments to 63%. The accentunating divide between men and women is also still predominant in the financial inclusion realm. We see that 72 per cent of adult men globally have a bank account, only 65 per cent of women do.

These eye-opening statistics are a reality check. A reminder that the world is still far from being financially inclusive as scores of people around the globe still don’t have a basic checking, savings or mobile money provider accounts. They are excluded from access to financial products like insurance, loans or mortgages, and have no protection for their money from unforseen calamities like theft or loss!

While the pandemic allowed those who had access to digital banking to make a seamless switch, the unbanked struggled to make ends meet without easy access to funds. Much needed stimulus relief or tax refund cheques took longer to arrive for those without a direct deposit who were ones that actually needed it the most. But why are the unbanked still deprived of abasic necessity like a bank account?

Why Are Countries Globally Still Facing A Largely Unbanked Population?

It comes down to the lack of funds according to some researchers around the globe. In the Philippines, a country with a high proportion of unbanked individuals, when questioned about their reason for their unbanked status, the majority (60%) cited ‘not having enough money’ as a key reason, as stated in a 2017 study of the Phillippines’ Central Bank.  The remaining 21% stated they did not need a bank account, while 18% said the lacked proper documentation.

While it would be ecpected that most of the unbanked population resides in the developing world and their income level would the main reason chaining down their ability to be banked, this is not the full picture. Of the unbanked population only half come from the 40% of the poorest households in their economy according to Fintech Futures (2020). Other major factors to consider in the equation include the cost of accounts and the distance to the nearest bank. People today also don’t fully trust banks with their money, with 36% of unbanked consumers in the FDIC’s latest research stating lack of trust in banks. These reasons bring more clarity to the ‘why’ behind the world’s unbanked, but tackling the ‘how’ is just as important.

How Can We Bank The Unbanked?

Yes, we have come a long way in providing accessible digital banking to consumers making big strides towards a more inclusive financial system, but much of traditional banking process are still manual, relying on traditional data from credit bureaus when performing identity verification checks. This doesn’t just alienate the modern consumer but makes it hard for a considerable portion of the population to access the services they require.

Fintechs are picking up the slack of traditional banks, with companies like PayPal, Chime, Cash App and Venmo offering bank-like services without the costs and concerns that one may sign on with an actual bank. Till date, some of the major benefits provided by Fintechs include the reduction of costs in payments and an increased access to credit.

While the private sector is pushing to irradicate the inequality in finacial services, they cannot do it alone. Countries need to forge forward together with inclusion at the top of their agenda. Countries worldwide have made national commitments to financial inclusion strategies and are continuing to work towards them. Countries like India have implemented initiatives for universal digital ID as scale, like Aadhaar and JDY accounts – that helped cover more than 1.2 billion residents. In other regions like Sub-Saharan Africa, allowing mobile financial services to thrive helped mobile money account ownership rose from 12% to 21% according to a 2018 WEF Financial Inclusion article. Solutions to combat financial exclusion are all around us. What matters now is we step up, shift gears and charge forward in the right direction, with the right strategy and collaborators to make an impact at scale.

The post The World’s Top 5 Unbanked Countries Have More Than 60% Of Their Population Without Bank Accounts appeared first on CFTE.

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80% of Investments in Fintech since 2012 have been in the Last 5 Years

The fintech scene has not just heated up in the last few years, it has set ablaze – with new innovations, technologies and business models. The proof lies in the numbers.  In the last few years, the floodgates to billions of dollars of investor backed funds have swung open and submerged the fintech landscape globally. Since 2012, global investments into fintech have been roughly $234.2 billion. Out of this, 81.7% of investments have been made  in the last 5 years.

The post 80% of Investments in Fintech since 2012 have been in the Last 5 Years appeared first on CFTE.

But the years around 2014 were special, because that’s when the mainstream media started to notice the Fintech phenomenon, and some started to realise that something was happening in finance.

Traditional financial institutions took notice of new trends such as peer-to-peer lending or robo advisors, but were usually dismissive of their impact. Entrepreneurs saw the opportunity, which led to a very rapid rise in the number of Fintech startups, with San Francisco and London being the major hubs. In places like London, the ecosystem started to take shape, with Level 39 or Startupbootcamp leading the charge. Venture capitalists accompanied this development, by quadrupling the amount of investment in Fintech in 2014 – reaching $12 billion. And the speech from Martin Wheatley, Chief Executive of the FCA, about “Innovation: the regulatory opportunity” set the tone for regulators around the world to think of innovation in financial services.

5 years is a very short amount of time, which makes the findings of the “5 Years in Fintech” even more striking. 5 years ago, most consumers were unaware of Transferwise or Credit Karma, and many businesses would not have heard of Stripe or Square. Today, many in Europe use Transferwise, and 50% of American millennials use Credit Karma. Millions of businesses use Stripe or Square as their payment providers.

Our objective in writing this report was to understand how Fintech had transformed – or not – financial services, and to identify what we, as an industry, got right – or wrong – about the impact of Fintech.

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