Pulse of Fintech - Q 2017

Pulse of Fintech - Q 2017

KPMG’s Q2 2017 Pulse of Fintechn report highlights the key trends and issues impacting the fintech market this quarter, both globally and in key regions around the world.

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Global analysis of investment in fintech

Welcome to the Q2’17 edition of KPMG’s the Pulse of Fintech, a report highlighting the key trends and issues impacting the fintechmarket this quarter, both globally and in key regions around the world.

Globally, the fintechmarket made a strong rebound in Q2’17, with total investment more than doubling on a quarter-over-quarter basis to more than USD $8.4 billion. Large increases in private equity (PE) funding and M&A funding propelled the increase, while the amount of venture capital (VC) investment held relatively steady.

Business-to-business (B2B) related fintech investments gained prominence during the quarter, prompted by growing recognition that many traditional financial institutions and insurance companies need to reduce their cost base.

This has led to an increase in corporate interest in technologies that can enable more efficient back office functions, such as artificial intelligence (AI), robotics, regtech, data & analytics and cloud services. Blockchain also remained a strong area for investment, expanding its reach well beyond banking and into potential applications for insurance, health and government.

The Americas dominated fintech investment during Q2, primarily the result of the $3.6 billion buyout of Canada-based DH. Excluding this outlier deal, it was clear that the US and Europe drove the vast majority of fintech investment, with both regions seeing $2 billion in investment. Asia, meanwhile, saw relatively even investment quarter over quarter, held back only by a lack of mega-deals. This could change rapidly over the next few quarters as more activity is expected, particularly from large tech giants and payments companies focused on international expansion.

Southeast Asia is set to become a key battleground as competition heats up in the payments space.

This report discusses these significant trends and other issues in this quarter’s report, in addition to examining a number of key questions driving interest in the fintechmarket today, including:

 

  • Will the fintechmarket continue to rebound?
  • Is the focus of fintech investment shifting from front office to back office
  • When will blockchainshow it can be commercialised?
  • What are the major opportunities driving investment in insurtech?

© 2017 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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