Have also been seeking investment opportunities in the domestic Chinese market. Investment Activity (VC, PE and M&A) in Fintech in China Sources: KPMG: Pulse of Fintech H2 2019, The China Guys Alipay and WeChat Pay, backed by Chinese giants Alibaba and Tencent respectively, have predominantly focused on growing their overseas payments channels through strategic investment and M&A activity while Chinese financial institutions have been heavily investing in foreign fintech firms to qualify for local licenses. Positive with 5-year industry investment increasing 187% over the period of 2014-19.ĭomestic fintech players have made strides in pursuing regional expansionary ambitions, with significant deal activity taking place between well-capitalized Chinese market leaders and emerging Southeast Asian startups in particular. Institutional investment freezes, mid- to long-term deal growth remains In recent quarters has slowed due to heightened geopolitical concerns and
Single fundraising of US$14b by China’s Ant Financial. Governments across the globe are beginning to take note of China’s burgeoning fintech capabilities and robust digital economy, begging the question, ‘What has made Chinese fintech so successful?’ What differentiates China’s fintech industry? Access to CapitalĢ019 saw an approximate total of US$4.48b of aggregate investment activity (VC, PE, M&A) in the Chinese fintech industry, falling short of 2018 totals characterized by the largest-ever From fintech investment totals to fintech-specific policy frameworks, China ranks first or second across nearly all metrics – and it has been noticed. According to a 2017 report released by PWC, “A huge chunk of incumbent financial institutions (88%) believe that part of their business will be lost to standalone fintech companies over the next 5 years.” Investors have recognized the market opportunity that fintech presents and are flooding the industry with capital.Ĭhina has been a driving force in the global fintech environment. With the financial industry ripe for disruption, innovative startups are scanning the field for their next opportunity. Modern fintech focuses on smoothing the remaining flaws in the banking system, such as expanding financial services accessibility, modernizing financial systems & infrastructure, improving consumer protections, and more. Fintech has significantly broadened in scope since its roots in the mid-1800s as the recent digitalization of financial services and widespread development of the digital economy has exposed nearly all facets of finance to technological disruption. In 2019, new unicorns nearly quintupled to twenty-four while total global industry investment increased by 21% to US$135.7b.įinancial technology, better known as “fintech,” is a term used to describe a class of emerging technologies that seek to improve upon inefficiencies within the financial system. In 2018, five fintech startups attained “unicorn” status while the industry attracted US$111.8b of total global investment. Has become a household word over the past several years – and for good reason. What does fintech attempt to solve in modern banking?
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