FinTech Market Overview

September 2018

Kirk Mahoney, Grady Kidder & Todd Clapp

FinTech Overview

▪ The Financial Services Technology (“FinTech”) industry is comprised of:

• Enablers: applications, information services and tech-enabled services provided to financial
services companies (e.g., banks, lenders, insurance companies, asset managers, broker-dealers,
etc.) and to the Office of the CFO of businesses of all sizes (SMB – Enterprise)
• Replacers: tech-enabled financial services businesses for businesses, consumers, non-profits,
and government entities

▪ Market Size
• US Financial Services is a $1.45TN industry, representing 7.5% of the US economy [1], growing at
a rate of ~5% annually [2]
• Employs 6.3mm people [1]

▪ Investor’s Perspective:
• Due to unabated Venture Capital interest and a talented pool of entrepreneurs, there is a large
supply of businesses ready for Growth Equity investment
• The recent increase in FinTech acquisitions by technology companies and financial services
companies give credence to the viability of strategic exits
• Recent regulatory developments including the creation of the OCC FinTech charter in the US and
PSD2 in Europe have created an inflection point for the industry

2 1. Source: BEA, 2017, industry designation 55; 2. 2012-2017 CAGR

FinTech Market Opportunity

▪ FinTech businesses fill two fundamental market gaps:

• Provide existing financial services better or to a broader population
• Provide new financial services

Replacers
Tech-Enabled
Challenger Robo Alternative
InsurTech Banks Advisors Lenders
Carriers

Lending
Provide Existing Services Better Marketplaces Provide New Services
Neobanks

Banking-as-a-
Platform
Alternative
Front Office Data
Tech Enabled Back Office SaaS & Data Providers
Outsourced SaaS & Data Provided to
Services Provided to
Enablers Fin. Services
Fin. Services
3
 Financial Services Technology “FinTech” Market Map
Enterprise Financial Management / Office of the CFO Financial GRC

Next Generation Transfers & Payments Capital Markets & Asset Mgmt. Tech

Banking & Lending Tech Insurance Technology “InsurTech”

Note: this landscape is intended to be a representative sampling and is not an exhaustive list.
4 Please direct inquiries to kirk@catalyst.com.
 Financial Services Technology “FinTech” Market Map
Enterprise Financial Management / Office of the CFO
• Applications and information services delivered to
finance & accounting departments; and tech-
enabled outsourced services
Next Generation Transfers & Payments
• Next-generation physical and digital payments
gateways; merchant acquirers; payment processors;
payments infrastructure providers; and money
transfer services
Banking & Lending Tech
• Comprised of applications and information services
delivered to banks, credit unions and non-bank
lenders; digital banks including challenger banks and
neobanks; tech-enabled alternative lenders; and
lending marketplaces
5
Financial GRC
• Applications and information services delivered to
the compliance & risk departments of corporations
and financial institutions; payments compliance
solutions; and tech-enabled risk-related services
Capital Markets & Asset Mgmt. Tech
• Applications and information services delivered to
capital markets companies; alternative wealth
managers, including “robo advisors”; next gen capital
markets infrastructure; alternative broker-dealers;
and alternative data solutions
Insurance Technology “InsurTech”
• Includes applications and information services
delivered to insurance brokers and carriers; IoT
systems generating alternative underwriting data;
tech-enabled outsourced services; insurance
comparison marketplaces; and tech-enabled
insurance companies
Please send any inquiries to kirk@catalyst.com