China has quickly become a powerhouse in FinTech, thanks to its strong technological and digital infrastructure.
“China now is a leader in terms of fintech development and we hope to bring its technologies to global markets,” said Victor Chu, CEO at First Eastern Investments, “Searching for new technology, traditionally, we came to the US, Japan and Europe, but now I know I should come to China.”
First Eastern has invested in 10 different FinTech startups in China and Hong Kong so far. For example, Bicai, a wealth management product sales app, aggregates product information from different online banks in the country to show customers a variety of return rates.
FinTech development in China has propelled the APAC (Asia-Pacific) region to the Number 1 spot in the FinTech sector, accounting for 48 per cent of the global market – worth US$11.2 billion – last year, according to data from CB Insights.
This trend has been on the rise for some time now. In February, KPMG released a report stating that 2016 was a record year for FinTech investments in China.
“Investment activities in VC-backed FinTech Chinese companies declined to 25 deals in 2016 from 40 deals a year ago, however, deal values increased 42.6 percent year to on year to hit a record high of USD6.7 billion, according to Pulse of Fintech, KPMG’s quarterly analysis of global investment trends in VC-backed fintech companies. The strong performance was largely boosted by three Chinese VC mega-deals in the first half of 2016.”
Arthur Wang, Partner and Head of China Banking, KPMG China, says: “Tech giants in China have become very active in FinTech, leading to significant large deals which tend to boost the FinTech sector. Looking forwards, mega-deals, or the lack of them, will likely continue to create major investment fluctuations, quarter to quarter.”
For the rest of 2017, the investment focus will be on data and analytics in the Asia sector. The ability to access and analyse customer data is an important enabler to the success of many FinTech product offerings. Other strong growth areas will include IoT (Internet of Things) technology and real-time payment platforms.
With such strong activity in the sector occurring in China, keeping up with the latest developments in this market should yield new insights for organizations wishing to compete in this space globally.
