When we talk about the vanguard of fintech innovation we look to New York, Silicon Valley, and London, but are we focusing our attention on the wrong continents entirely?
The UK may have populated just shy of a quarter of KPMG’s global list of emerging fintechs and been named the leading fintech centre by EY, but many are setting their sights on the growing pace of Asian markets and are asking whether China can produce the same financial unicorns to match the growth of Baidu, Alibaba or Tencent (BAT).
Within two years China added six companies to KPMG’s list of 50 established fintechs, with Alibaba-backed ZhongAn securing the primary position.
Second only to California in terms of investment, China are rapidly unlocking finance for SMEs and startups, and already boast more peer-to-peer lending platforms than the rest of the world combined. [EY]
With three fintech accelerators created within a year, and the second highest adoption rate of fintech products, Singapore houses the largest condensed cluster of fintech incubators globally per capita.
Already recognised as a leading hub, the gateway to China and the heart of Asia’s capital markets, Hong Kong, possesses possibly the greatest potential of all for growth in the coming year.
All in all, Asia’s fintech sector faces a unique opportunity to market to the 1.2 billion-strong unbanked population who may be quicker to adopt a financial alternative to the banks.
Having a digital savvy generation with better access to mobile technology than bank accounts allows for the widespread adoption of fintech that might be slower in bank dependent nations.
Accenture’s latest report reaffirms the growth of Asia Pacific with investment in the first quarter of 2016 increasing by 517%. A year-on-year rise from $445 million to $2.7 billion – driven almost entirely by Chinese fintech investments.
When you consider that major investment in 2014 jumped by 200% according to KPMG. Of which, nearly four-fifths were reserved to the US, 12% to Europe and less than 6% to Asia you can see how the industry has evolved globally. Next year when we look back at the market share, we’ll see a very different picture.