Fintech investments are set to at least quadruple in 2015, according to a new Accenture report.
Accenture’s Fintech Investment in Asia-Pacific set to at least quadruple in 2015 report indicated that fintech investments across the Asia-Pacific region rose significantly from around US$880 million in 2014 to nearly US$3.5 billion in the first nine months of 2015.
The largest share of investment deals were in payments (40%) and lending (25%), two areas that have traditionally been the sole domain of banks.
“We are seeing the convergence of two trends: venture capitalists are clearly signalling that fintech is a growth opportunity and simultaneously, financial services companies are waking up to the vast opportunities created by the current wave of fintech,” said Jon Allaway, senior managing director of Accenture’s Financial Services group in ASEAN and executive sponsor of the FinTech Innovation Lab Asia-Pacific. “Financial services institutions are embracing cloud technology, mobile wallets and blockchain to fundamentally redefine their business and operational models. We are seeing this in the increased investments from banks in fintech venture capital funding, incubators and startups.”
According to the report, the volume of deals is set to grow slightly, but their value will increase substantially due to larger investments in, and from, China.
“Major non-traditional financial services companies have been investing in fintech payments in China for the past year,” said Beat Monnerat, senior managing director at Accenture and the company’s Financial Services lead in Asia Pacific. “The increasing deal size should serve as a wake-up call to financial services companies in China and across Asia-Pacific that if they do not offer truly useful, customer-friendly digital solutions, competitors will step into the breach not just on the retail front but also in commercial transactions.”
Accenture predicts that more financial services firms will turn to fintech to streamline operations, improve regulatory compliance and leverage new currencies.
Meanwhile, banks will increasingly explore how they can store sensitive customer data more securely in a private cloud, while still taking advantage of the efficiency, flexibility, on-demand capabilities and lower costs cloud can offer. This creates opportunities for fintech startups to develop new services tailored around the cloud.
Accenture also expects investment in cyber security to increase significantly over the next 12 months, particularly following widespread media reports of recent large-scale data breaches.
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