Fin­tech growth ac­cel­er­ates in Asia with record $4.5b in­vest­ments

The Pak Banker - - COMPANIES/BOSS -

In­vestors poured a record $4.5 bil­lion into fi­nan­cial start-ups in Asia last year, four times as much as the pre­vi­ous year, data shows, putting the re­gion at the cen­ter of the global tech rev­o­lu­tion poised to shake up the fi­nan­cial ser­vices in­dus­try.

To­tal in­vest­ments into peer-topeer lenders, pay­ment ser­vices com­pa­nies and In­ter­net in­sur­ers glob­ally rose to $19.1 bil­lion, 60 per­cent more than in 2014, data from KPMG and CB In­sights showed.

In Asia, in­vest­ments rose at a much faster pace, led by mam­moth fund­ing rounds for fin­tech com­pa­nies in China and In­dia, and with bil­lions of con­sumers in the re­gion us­ing their mo­bile phones for ev­ery­thing from buy­ing in­sur­ance to pay­ing for goods, the trend is ex­pected to con­tinue.

China, where in­vest­ments surged to $2.7 bil­lion, at­tracted nearly three times the in­vest­ments seen in Bri­tain over the 2014-2015 pe­riod, the data showed.

"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 have large pop­u­la­tions and a high adop­tion rate of new tech­nolo­gies, mak­ing them fer­tile ground for fin­tech com­pa­nies look­ing to dis­rupt tra­di­tional play­ers such as banks, in­sur­ance com­pa­nies and credit card oper­a­tors.

In­dia, where nearly two-fifths of its 1.27 bil­lion peo­ple have no bank ac­counts and only 252 mil­lion have In­ter­net ac­cess, is seen as a promis­ing growth mar­ket for firms look­ing to lev­er­age tech­nol­ogy to con­nect fi­nan­cial ser­vices and prod­ucts, par­tic­u­larly through mo­bile phones.

"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.

In China, on­line lend­ing plat­form Lu­fax and in­ter­net in­surer Zhong An On­line Prop­erty and Ca­su­alty In­sur­ance now rank as the world's top two fin­tech com­pa­nies by val­u­a­tion.

Lu­fax closed a $1.2 bil­lion fund­ing round in Jan­uary, while Alibaba Group Hold­ing Ltd's fi­nance arm, Ant Fi­nan­cial Ser­vices Group, is look­ing to raise up to $3 bil­lion, set­ting the stage for an­other block­buster year in 2016 in the re­gion.

In­dia's mo­bile pay­ments ser­vices firm One97 Com­mu­ni­ca­tions came in sixth among global fin­tech gi­ants, un­der­scor­ing the po­ten­tial value in­vestors place on such firms in the re­gion. "There's a lot of in­ter­est in this seg­ment," Har­ish said.

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