Financial Technology and Specialty Finance Sector Update and 2014 Outlook

Wednesday, March 12, 2014

The global economy is stable and steady with some modest acceleration in several markets, in our opinion, and will likely be slightly stronger in 2014 than it was in 2013.

According to Financial Services and Technology analyst Robert Napoli, the secular growth opportunity in global electronic payments has not declined in the least.We still believe that about 85% of global retail payment transactions use cash and checks, in line with three years ago, despite double-digit secular growth.”

Furthermore, international growth of electronic payments should continue to materially exceed growth in the United States. Those companies poised to benefit from this international growth should show strong financial results despite the uncertain economic environment. Napoli believes Asia, Latin America, the Middle East, and Africa all have substantial long-term electronic payment growth opportunities.

The growth of consumer-directed healthcare is the best way to control expanding healthcare costs, according to Napoli, and the Affordable Care Act has accelerated the trend. Private healthcare exchanges appear poised for substantial growth.

In addition, while regulatory pressures continue to build for the financial technology sector, most companies will navigate the environment, but costs continue to rise. Financial technology continues to outperform the market, and valuation continues to expand.

For more information or a copy of the report, please contact your William Blair representative.

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