Global professional services company Accenture has released a report on the current state of global investments in financial technology companies. The research analyses the latest global fintech trends, explores the challenges and opportunities that fintech companies pose for banks, and looks at how the major fintech disruptors are changing the world.
Accenture reveals that global investments in fintech ventures reached $5.3bn in the first quarter of 2016 – registering a 67% increase over the same period last year. Moreover, the percentage of investments going to fintech companies in Europe and Asia-Pacific nearly doubled to 62%. The study also shows that fintech investments grew 75% in 2015 – to a grand total of $22.3bn
Digging more in depth, the study determines that collaborative fintech companies – those defining existing financial institutions as customers rather than competitors – are gaining ground over so-called “disruptive” players – those entering the market to compete against traditional financial companies.
Julian Skan, a managing director in Accenture’s Financial Services group, offered his thoughts:
“The proportion of competitive fintech ventures in Europe and Asia is much higher than in North America, which largely reflects the earlier stages of maturity of fintech markets, particularly outside of London. London’s welcoming regulatory environment has made a preferred market for competitive fintech ventures to test their propositions. Banks too stand to benefit from this, as it drives momentum to re-imagine their own capabilities.”
The report cites “relatively low participation” in venture-investing by the banks themselves. In 2015 the banks invested just $5bn (22%) of the total invested funds.
Other key points include:
In Europe, fintech investments – led by Germany – more than doubled (120%) between 2014 and 2015, with the number of deals increased by 50%.
In Asia-Pacific, fintech investments more than quadrupled in 2015 to $4.3bn. The lion’s share of those investments took place in China ($1.97bn) and India ($1.65 bn).
North American fintech investments grew 44% to $14.8bn in 2015 and the US continued to dominate the sector with 667 fintech deals.
The number of big deals notably increased last year. Indeed, Accenture counted 94 fintech deals larger than $50m, compared to 52 in 2014 and just 15 in 2013.
Richard Lumb, Accenture’s group chief executive of Financial Services, concluded:
“The drive for fintech innovation is spreading well beyond traditional tech hubs. New frontiers like robotics, blockchain and the Internet of Things are bound less by geography than by the industry’s ability to adopt and scale clever ideas that improve service and efficiencies. The so-called ‘Fourth Industrial Revolution’ is a global phenomenon that brings new innovation and digital companies that compete and collaborate with traditional financial services. Bank customers stand to gain from this.”
The full report is available here.
