With China overtaking the US, these three charts show the top countries for fintech in 2023 (2024)

From the United States to China, countries around the world are vying to become leaders in financial technology, a highly lucrative sector that has grown over the years to include everything from retail banking to online wealth management.

Since the 2008 financial crisis, thousands of new companies have been created with the aim of taking over the established financial players and offering more accessible services to both consumers and businesses.

In Britain, startups like Monzo and Starling took the banking world by storm with their digital offerings, while in ChinaAli BabaInTencentlaunched their own respective mobile wallets, Alipay and WeChat Pay.

In August, CNBC launched, in partnership withstatesman, launched a list ofthe world's best fintechs. To select the best global companies, Statista used a rigorous methodology that evaluated a number of key company metrics and fundamentals, including revenue and workforce.

Statista identified 200 of the top companies worldwide in nine categories, including neobanking, digital payments, digital assets, digital financial planning, digital wealth management, alternative finance, alternative lending, digital banking and digital business solutions.

Using additional data from Statista, CNBC analyzed the top countries overall when it comes to financial technology and divided the analysis into three key areas of focus:

• The countries with the most valuable fintech industries by market capitalization.
• Total number of top fintech companies as identified by Statista.
• The number of unicorn companies with valuations of $1 billion or more in different countries.

So which countries are at the top when it comes to fintech? In three graphs, this is what we found.

According to data from Statista, the US will be home to the world's most valuable financial technology companies in 2023, but China isn't far behind, with mega-payments companies like Tencent and Ant Group making the country a solid number two.

Valuation data is updated as of April 2023, excluding Ant Group, Stripe, Nubank, Checkout.com, Revolut, Chime, Polygon, Rapyd, Ripple, Blockchain, and Plaid.

Collectively, the United States produces the most value in fintech, with eight of the fifteen highest-valued financial technology companies in the world with a combined value of $1.2 trillion based on state.

Visa and Mastercard are the two largest fintech companies by market capitalization with a combined market capitalization of $800.7 billion.

China is home to the second most valued fintech industry with its financial technology giants having a total market capitalization of $338.92 billion.

According to CNBC, the US was home to 65 of the top fintech companieslist of the top 200 fintech companies in the world. Britain came in a close second with 15 of the top 200 fintech names globally, while the EU is home to 55 top fintech companies.

The US has a vibrant fintech market, thanks in no small part to the large number of investors.

Silicon Valley is a natural home for the sector, given its history of creating some of the largest tech companies in the world, such as Apple, Meta, Google and Amazon, and an established venture capital ecosystem with major players like Sequoia Capital and Andreessen Horowitz present.

In the US, some of the top global fintech companies on Statista's list include names like Stripe,PayPalInIntuitive. These are all companies with significant shares in their respective markets and signature products used by thousands, if not millions, of companies both large and small.

Britain also has a prominent fintech industry.

Backed by many forces – from innovation-driven regulars like the Financial Conduct Authority, to growing capital pools including venture capital and private equity, to a government that has tried to put fintech high on the agenda – the UK has managed to make significant gains in fintech world, from digital banking Monzo to listed payment companiesSlim.

In China, another prominent fintech player identified by Statista, the digital financial services market is huge.

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Tencent's WeChat Pay and Ant Group's Alipay have cornered the mobile payments market, providing ample competition for the fragmented, underdeveloped banking sector. Consumers in China tend to have a closer relationship with digital platforms like WeChat than with established lenders.

But the fintech industry faces a number of challenges, not least macroeconomic headwinds.

One of the biggest obstacles the industry currently faces is declining liquidity in venture capital.

In Europe, a combination of Russia's invasion of Ukraine, the aftermath of Covid-19 lockdowns and resulting interest rate hikes has impacted most major economies.

In Britain, the tech industry's problems have generally been exacerbated by Brexit, which critics say will limit foreign investment.

“The on-call environment in general is struggling,” Nick Parmenter, CEO of business management consultancy Class35, told CNBC. “IPOs have become less and less valued, funds are struggling to raise money from LPs and valuations have fallen throughout the business cycle.”

“This makes it much more difficult to raise growth capital, causing management teams to become more conservative in their cash spending. This has had a trickle-down effect on the fintech market – consumers have less discretionary income to invest or spend, limiting the revenue potential of consumer-facing fintechs and small businesses.”

Britain is once again flexing its fintech muscles when it comes to the number of richly valued 'unicorn' companies in the country – the UK is second only to the US, where most of the world's fintech unicorns are based. Unicorns are defined as venture capital-backed companies with a valuation of $1 billion or more.

In Britain, some of the biggest unicorns include online banking startup Revolut ($33 billion), crypto wallet provider Blockchain.com ($14 billion), and digital payments groups Checkout.com ($11 billion), Rapyd ($8.75 billion) and SumUp ($8.5 billion). ). billion).

In the United States, the largest fintech unicorns are Stripe ($95 billion), Chime ($25 billion), Ripple ($15 billion), Plaid ($13.5 billion), Devoted Health ($12.6 billion and Brex ($12.3 billion). ).

Other leading fintech unicorn ecosystems include India with 17 unicorns and China with eight. France, Brazil and Germany each have six fintech unicorns.

In 8th place is Mexico, with five fintech unicorns, Singapore, also with five, and the Netherlands, which has a total of four.

WATCH: The US ranks first for the top global fintechs in a new report from Statista and CNBC