Market Size of Germany Fintech Industry
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | > 5.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Fintech in Germany Market Analysis
The Germany Fintech market is expected to register a CAGR of 5% in the forecast period.
Fintech adoption rates are growing around the world. According to EY, 64 percent of global consumers use Fintech, with a rate as high as 87 percent in China and India. Fintech adoption in Germany almost doubled during 2017-18, with German use now at the same level as the global average. German banking licenses are strictly regulated by the Federal Financial Supervisory Authority, Bafin. Fintech founders have reported difficulties while applying for a banking license and navigating the stringent regulations to enter the marketplace.
The COVID-19 pandemic and the corresponding health measures changed customer behavior immensely. As people sought to make less physical contact, the demand for contactless paying services grew strongly in 2020. According to Germany Trade and Invest, 43% of Germans changed their payment method to cashless options to avoid human contact. Even small retail shops that in the past only accepted cash switched to contactless payments for hygiene reasons. However, only 8% of German consumers preferred mobile payment options to classic card payments.
Nevertheless, in 2020, because of a struggling economy due to the impact of Covid-19, investment in Fintech's worldwide went down. According to a KPMG report on global Fintech, the total investment from private equity, M&A, and venture capital, was around USD 150 billion in 2019, whereas in 2020, only USD 26 billion were invested globally. As the international economy is recovering, investments are expected to rise back to the level of 2019.
The innovative technologies and disruptive business models are removing market entry and expansion barriers, with German Fintech looking to expand beyond Germany and international Fintech also entering the German market. Almost three-quarters of foreign Fintechs are active in the Banking and Lending, Payments, and Enabling Processes & Technology segments.
