How do you assess the market size, growth, and segmentation of the fintech industry?

1 Define the scope

The first step to assess the market size, growth, and segmentation of the fintech industry is to define the scope of your analysis. This means narrowing down the specific segments, regions, and time frames that you want to focus on. For example, you might want to analyze the global market for mobile payments, or the European market for robo-advisors, or the US market for peer-to-peer lending. You can use various sources, such as industry reports, trade publications, and news articles, to get an overview of the different segments and regions within the fintech industry.

2 Estimate the market size

The next step is to estimate the market size of the fintech segment or region that you have defined. The market size is the total value or volume of transactions or customers in a given market. There are different ways to estimate the market size, such as top-down, bottom-up, and value chain methods. The top-down method involves using existing data from reliable sources, such as market research firms, regulatory agencies, or industry associations, to estimate the total market size and then applying a percentage or a ratio to get the specific segment or region. The bottom-up method involves using data from individual companies or products within the segment or region and then aggregating them to get the total market size. The value chain method involves identifying the different stages and actors involved in the production, distribution, and consumption of the segment or region and then estimating the value added at each stage.

3 Assess the market growth

The third step is to assess the market growth of the fintech segment or region that you have defined. The market growth is the rate of change in the market size over a period of time. You can use historical data, such as revenue, sales, or users, to calculate the compound annual growth rate (CAGR) or the average annual growth rate (AAGR) of the market. You can also use projections, such as forecasts, scenarios, or trends, to estimate the future growth rate of the market. You can use various sources, such as industry reports, trade publications, and news articles, to find historical and projected data for the fintech industry.

4 Segment the market

The fourth step is to segment the market of the fintech segment or region that you have defined. Segmenting the market means dividing it into smaller and more homogeneous groups of customers or products based on certain criteria, such as demographics, behavior, needs, or preferences. Segmenting the market can help you understand the different characteristics, preferences, and needs of your potential customers or competitors. You can use various methods, such as cluster analysis, factor analysis, or conjoint analysis, to segment the market using quantitative data, such as surveys, transactions, or usage. You can also use qualitative methods, such as interviews, focus groups, or observations, to segment the market using insights, opinions, or feedback.

5 Analyze the segments

The fifth step is to analyze the segments that you have identified in the previous step. Analyzing the segments means evaluating their size, growth, attractiveness, and competitiveness. You can use various tools, such as Porter's five forces, SWOT analysis, or BCG matrix, to analyze the segments using qualitative and quantitative data. You can also use various metrics, such as market share, profitability, customer satisfaction, or loyalty, to measure the performance of the segments. Analyzing the segments can help you identify the strengths, weaknesses, opportunities, and threats of your target market or niche.

6 Communicate the results

The final step is to communicate the results of your market size, growth, and segmentation analysis of the fintech industry. Communicating the results means presenting your findings, conclusions, and recommendations in a clear, concise, and compelling way. You can use various formats, such as reports, presentations, dashboards, or infographics, to communicate your results using visual aids, such as charts, graphs, tables, or images. You can also use various techniques, such as storytelling, data visualization, or persuasion, to communicate your results using narratives, insights, or arguments.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?