Fintech investment in Asia surpasses the U.S., report finds

By Moriah Costa on 1st March 2017

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A number of large fintech deals in China caused the region to overtake North America for the first time last year.

Fintech investment in Asia surpasses the U.S., report finds

Financial technology in the Asia-Pacific surpassed the U.S. as investments in the area doubled to $11.2bn in 2016 from $5.2bn in 2015, a report from Accenture found.

Global investment in financial technology grew by 10 per cent to $23.2bn in 2016, largely driven by growth in China. North America raised $9.2bn in financing, while Europe attracted $2.4bn. The total was due mainly to a few megadeals in China and Hong Kong, which accounted for 43 per cent of total investment globally.

“For many years Silicon Valley, New York and London were the dominant centres of innovation and demand, but now fintech has spread like wildfire around the world, and Asia-Pacific has become the rising star,” said Richard Lumb, group chief executive of financial services at Accenture.

Deals in China and Hong Kong dominated Asia’s growth, accounting for $10.2bn, or 91 per cent, of Asia-Pacific’s $11.2bn in fintech investments in 2016. The number of deals across the world also grew in 2016, from 1,500 to 1,800.

“Alibaba and JD.com were two major fintech investors this year, as they focus on providing their customers with end-to-end services including payments and lending,” said Albert Chan, managing director financial services China at Accenture.

Chinese ecommerce gain Alibaba Group’s financial affiliate Ant Financial Services Group closed a $4.5bn fundraising round in April, while electronic company JD.com raised $1bn in January. Online finance marketplace Lufax also completed $1.2bn of fundraising that month.

Political uncertainty led to decline in some areas of Europe and North America, the report found. Investment in Europe and North America declined by 24 per cent, but the number of deals rose by 48 per cent.

“The U.K.’s decision to exit the European Union added to political uncertainty in key fintech markets, and the prospects for regulatory change in the financial sector were particularly pronounced during the 2016 U.S. election cycle,” the report stated.

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