Daily Management Review

With Record $4.5 Billion Investments, Fintech Growth Accelerates in Asia


03/11/2016




With Record $4.5 Billion Investments, Fintech Growth Accelerates in Asia
Asia is poised to shake up the financial services industry as investors poured a record $4.5 billion into the financial start-ups in Asia last year.
 
Data shows that this is four times as much as was put in the previous year which has put the Asian region at the center of the global tech revolution.
 
Data from KPMG and CB Insights showed that there was a 60 percent in investment in 2015 compared to 2014 as the total investments into peer-to-peer lenders, payment services companies and Internet insurers globally rose to $19.1 billion.
 
With billions of consumers in the region using their mobile phones for everything from buying insurance to paying for goods and forecasts expecting the trend to grow and led by mammoth funding rounds for fintech companies in China and India, investments rose at a much faster pace In Asia.
 
The data showed that nearly three times the investments seen in Britain over the 2014-2015 period were attracted by China where investments surged to $2.7 billion.
 
"Naturally, because growth in the region is quite high, you should expect to see continued investment," said Zennon Kapron, founder of Shanghai-based financial industry research firm Kapronasia.
 
India and China are fertile ground for fintech companies looking to disrupt traditional players such as banks, insurance companies and credit card operators as the two countries have large populations and a high adoption rate of new technologies.
 
A promising growth market for firms looking to leverage technology to connect financial services and products, particularly through mobile phones is India where an estimated nearly two-fifths of its 1.27 billion people have no bank accounts and only 252 million have Internet access.
 
"The rising number of people getting used to smartphones and new technologies in India will result in more funds flowing into the fintech solutions providers in the near-term at least," said Harish HV, an India-based partner at advisory firm Grant Thornton.
 
The world’s top two ranked fintech companies by valuation are in China and they are online lending platform Lufax and internet insurer Zhong An Online Property and Casualty Insurance.
 
Setting the stage for another blockbuster year in 2016 in the region, while Alibaba Group Holding Ltd's finance arm, Ant Financial Services Group, is looking to raise up to $3 billion, Lufax closed a $1.2 billion funding round in January.
 
Underscoring the potential value investors place on such firms in the region, India's mobile payments services firm One97 Communications came in sixth among global fintech giants.
 
"There's a lot of interest in this segment," Harish said.
 
(Source:www.reuters.com) 






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