Thursday 28 Mar 2024
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SINGAPORE (Aug 25): Investments in financial technology (fintech) ventures in the Asia-Pacific region in the first half of 2016 has surged to US$9.62 billion (S$13 billion) — more than double of the US$4.26 billion invested in the whole of last year.

This is more than the US$4.58 billion and US$1.85 billion attracted by fintech ventures in North America and Europe, respectively, over the same period.

China is way ahead of the field: it accounted for over 91% of the region’s total fintech investments in 1H16, with some US$8.85 billion raised.

According to Accenture, this was mainly due to big investments in a few select fintech companies in China.

“China’s established companies, rather than nascent startups, are at the forefront of the fintech trend in the region,” says Beat Monnerat, Accenture’s senior managing director, Financial Services Asia-Pacific.

Ant Financial Services Group, an affiliate of Jack Ma’s e-commerce giant Alibaba Group Holding, closed a US$4.5 billion fundraising round in April.

Lufax, a peer-to-peer lender and broker backed by Ping An Insurance, completed a US$1.2 billion round of fundraising in January. In the same month, China’s second largest e-commerce company, JD.com, raised US$1 billion in new funding for its consumer finance subsidiary, JD Finance.

“This is transforming China’s financial services industry and is consistent with the global ‘Fourth Industrial Revolution’, which is bringing innovation from non-traditional competitors to the financial services industry,” says Monnerat.

“The fintech trend in China continues to skew toward online payments and lending, including peer-to-peer (P2P), which is creating market-share dilution for banks,” adds Albert Chan, Accenture’s managing director of financial services China. “China’s banks, whether building their own competitive platforms or not, should consider investing in collaborative fintech ventures in order to remain competitive.”

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