As an entrepreneurship consultant who assists small and medium enterprises (SMEs) across industries, I closely track the latest developments in the financial services sector globally.
Understanding key statistics and trends equips me to better advise my SME clients on critical areas like banking relationships, investment strategies, insurance coverage and financial planning – all crucial to their growth and success.
In this comprehensive guide tailored for entrepreneurs and mid-sized companies, I‘ve compiled the most important financial services data points and insights you need to factor into your business plans for 2024.
Global Snapshot: Massive and Rapidly Evolving Industry
The breadth of the financial services industry is vast, encompassing everything from banks and investment firms to insurance companies and wealth advisors that help both retail and institutional clients manage money. Some key figures:
- At $25.5 trillion in size globally as of 2022 and growing nearly 10% annually, financial services drives the modern economy.
- 7.4% of US GDP, equivalent to $1.5 trillion, comes from this sector with over 1.5 million firms.
- India‘s $500 billion industry gets a boost from high-growth FinTech firms (22% CAGR) that now contribute $31 billion.
- UK industry contributes £173.6 billion yearly to the economy or 8.3% of total output.
For SMEs competing with larger corporations, keeping pace with new innovations and specialization emerging within financial services is now imperative.
Banking: Digital Transformation Underway
Rising mobile/online usage and open banking access via FinTech players is revolutionizing how small companies can leverage banking services and unlock funding rather than rely on traditional institutions:
- Top 1000 global banks hold over $10 trillion in assets presently with China narrowing lead over the US.
- Mobile banking users to reach 3.6 billion by 2024 – that‘s nearly half the world‘s population.
- Global BaaS market (enables FinTechs) valued at $39 million in 2021, forecast to grow 5X to $156 million by 2027 at 26% CAGR.
For SMEs, opportunities to quickly/easily secure loans through digital lending platforms continue to expand globally given the trends.
Insurance: Rising Prominence and Specialization
Insurance is often overlooked by small ventures, but coverage tailor-made rather than one-size-fits all policies developed by insurtechs can be a competitive advantage in risk management.
- Premiums constitute 7.1% or $6.8 trillion of all economic activity globally in 2021.
- In advanced markets insurance penetration is high – 10% of GDP for France and peak of 20% in Hong Kong.
- Health insurance alone made up $2 trillion+ in annual market size in 2024 and growing over 4% yearly.
Cyber insurance, professional liability coverage and other emerging verticals worth evaluating beyond vanilla corporate policies.
Financial Planning: Wealth Management Dominates
Sophisticated financial planning once available mainly to the affluent is now within reach of everyday SMEs as well thanks to roboadvisors.
- Global wealth management tops $100 trillion in assets under management (AUM) as profitable specialty.
- Asia-Pacific leads the $207 billion financial advisory market given rapid growth, with US planners managing $56 billion.
- In America close to 300,000 professional financial advisors provide specialized services to retail and institutional clients.
Accurately tracking income/expenditure and modeling future finances is vital for small companies too in the digital era.
While the financial services ecosystem globally might seem complex for modest-sized ventures, the data shows even small and mid-sized firms cannot afford to ignore external expertise that saves money over the long-term. Evaluating modern options for banking, insurance and advisory tailored to your risk appetite and goals is well worth it!
