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Modest fintech investment in China in H1’19, but still dominates top 10 deals ranking in Asia Pacific, according to KPMG’s Pulse of Fintech

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Fintech investment in China has got off to a modest start in 2019 following record levels of investment last year, according to the Pulse of Fintech H1’19, a bi-annual report on global fintech investment trends published by KPMG.

Investment into fintech companies in China (including VC, PE and M&A activity) amounted to US$2.5 billion across 32 deals in the first half of 2019, down from the US$16.3 billion across 77 deals seen in the first half of 2018. The lack of megadeals in the country was the main driver of the decline, which affected total investment into fintech across Asia Pacific – dropping from US$18.3 billion across 256 deals in the first half of 2018 to US$3.6 billion across 102 deals in the first half of this year.

The fall in China and Asia reflected the wider trend globally, with US$37.9 billion invested into global fintech across 962 deals, falling from US$62.9 billion seen in the first half of 2018 across 1421 deals. This was also attributed to a pullback in mega deals.

Despite this, China still had a strong presence in the ranking of top 10 Asia Pacific fintech deals, taking four spots. NCF Wealth Holdings Limited’s US$2 billion merger with Hunter Maritime Acquisition Corp topped the deals in the region, followed by the US$100 million Series F financing for information services provider Shanghai Dianrong Financial Information Services, the US$94.8 million Series A financing for consumer finance firm Wiseco Technology, and crowd funding platform Shuidichou’s US$74 million Series B financing.

Fintech market maturing and evolving in China

Relatively quiet fintech investment activity in the first half of 2019 is in part a reflection of the significant maturation in China’s payment sector, following two years of ongoing investment and mega deals. Despite this, a number of less mature areas within fintech are rapidly growing, including microfinance and consumer finance.

At the technology level, China is also seeing significant interest in AI, cloud-solutions, big data and blockchain. Blockchain is expected to gain more attention from fintech investors, particularly in microfinancing. AI, big data and cloud services are also expected to remain attractive and Regtech is poised to see growing investment given the strong focus being given to it by China’s central government and provincial government authorities. As these burgeoning areas of fintech evolve and gain more traction, fintech investment in China is expected to rebound.

Tracy Zhang, Lead Partner and Head of Tax Transformation at KPMG China, said, “China’s fintech market is unique. Baidu, Alibaba and Tencent dominate and are making acquisitions to try to cover all the major sectors. We therefore expect the minority market to see more participation from small and medium-sized fintech players.”

Hong Kong pushes forward fintech market with virtual banking licenses

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The Hong Kong Monetary Authority’s decision to issue its first batch of virtual banking licenses to eight companies represents a major stride in the development of fintech in the city. These companies reflect a diverse mix of non-traditional banking organizations, including insurance companies and telecoms, with several of China’s tech giants also represented in the first batch. Hong Kong will likely see increased investment both from traditional banks and non-traditional players looking to capitalise on the drive in virtual banking started this year.

The city’s innovation ecosystem also expanded during the first half of 2019, with digital start-up community Cyberport signing a deal with Ping An OneConnect to gain access to its Gamma API platform, which should spur innovation.

Avril Rae, Director and Head of Fintech at KPMG China, said, “The new Hong Kong virtual banking licenses are a very exciting development. As the virtual banks start to implement their strategies over the next year, we will see the major traditional banks strive to keep up in response. The expectation is that the virtual banks will be able to grow over time.”

 

SOURCE KPMG

Fintech

Fintech Pulse: Your Daily Industry Brief (Chime, ZBD, MiCA)

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As we close out 2024, the fintech industry continues to deliver headlines that underscore its dynamism and innovation. From IPO aspirations to groundbreaking regulatory milestones, today’s updates highlight the transformative power of fintech partnerships, regulatory evolution, and disruptive technologies. Here’s what you need to know.

Chime’s Quiet Step Toward Public Markets

Chime, the U.S.-based financial technology startup best known for its digital banking services, has taken a significant step by filing confidential paperwork for an initial public offering (IPO). As one of the most valuable private fintechs in the U.S., Chime’s move could potentially signal a renewed appetite for fintech IPOs in a market that has been cautious following fluctuating valuations across the tech sector.

With a valuation that reportedly exceeded $25 billion in its last funding round, Chime’s IPO could set a new benchmark for the industry. Observers note that its strong customer base and revenue growth may make it an appealing choice for investors seeking to capitalize on the digital banking boom. However, the timing and success of the IPO will depend on broader market conditions and the regulatory landscape.

Source: Bloomberg

ZBD’s Pioneering Achievement: EU MiCA License Approval

ZBD, a fintech company specializing in Bitcoin Lightning network solutions, has made history by becoming the first to secure an EU MiCA (Markets in Crypto-Assets Regulation) license. This landmark approval by the Dutch regulator positions ZBD at the forefront of compliant crypto-fintech operations in Europe.

MiCA, which aims to harmonize the regulatory framework for crypto-assets across the EU, has been a focal point for industry players aiming to establish legitimacy and expand their offerings. ZBD’s achievement not only validates its operational rigor but also sets a precedent for other fintech firms navigating the evolving regulatory landscape.

Industry insiders view this as a strategic advantage for ZBD as it broadens its footprint in Europe. By leveraging its regulatory approval, the company can accelerate its product deployment and establish trust with institutional and retail users alike.

Source: Coindesk, PR Newswire

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The Fintech-Credit Union Synergy: A Blueprint for Innovation

The convergence of fintechs and credit unions continues to reshape the financial services ecosystem. Collaborative initiatives, such as the one highlighted in the recent partnership between fintech innovators and credit unions, are proving to be a potent force in delivering tailored financial solutions.

This “dream team” approach allows credit unions to leverage fintech’s technological expertise while maintaining their community-focused ethos. Key areas of collaboration include digital payments, personalized financial management tools, and enhanced loan processing capabilities. These partnerships not only enhance member engagement but also enable credit unions to remain competitive in an increasingly digital-first financial environment.

Industry analysts emphasize that such collaborations underscore a broader trend of traditional financial institutions embracing fintech-driven solutions to bridge service gaps and foster innovation.

Source: PYMNTS

Tackling Student Loan Debt: A Fintech’s Mission

Student loan debt remains a pressing issue for millions of Americans, and a Rochester-based fintech aims to offer relief through its cloud-based platform. This innovative solution is designed to simplify loan management and provide borrowers with actionable insights to reduce their debt burden.

The platform’s features include repayment optimization tools, personalized financial education, and seamless integration with loan servicers. By addressing the complexities of student loan management, this fintech is empowering borrowers to make informed decisions and achieve financial stability.

As the student loan crisis continues to evolve, solutions like this highlight the critical role fintech can play in addressing systemic financial challenges while fostering financial literacy and inclusion.

Source: RBJ

Industry Implications and Takeaways

Today’s updates underscore several key themes shaping the fintech landscape:

  1. Regulatory Milestones: ZBD’s MiCA license approval exemplifies the importance of regulatory compliance in unlocking growth opportunities.
  2. Strategic Partnerships: The collaboration between fintechs and credit unions demonstrates the value of combining technological innovation with traditional financial models to drive customer-centric solutions.
  3. Market Opportunities: Chime’s IPO move reflects a potential revival in fintech public offerings, signaling confidence in the sector’s long-term prospects.
  4. Social Impact: Fintech’s ability to tackle systemic issues, such as student loan debt, showcases its role as a force for positive change.

 

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SPAYZ.io prepares for iFX EXPO Dubai 2025

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Leading global payments platform SPAYZ.io has confirmed it will be attending iFX EXPO Dubai 2025 on 14 to 16 January. Exhibiting at Stand 64 at Trade Centre Dubai, SPAYZ.io’s team of professionals will be on hand providing live demonstrations of its renowned payment services for payment providers. Attendees will also receive exclusive insight into SPAYZ.io’s plans for 2025 alongside early early access to its upcoming plans for the new year.

SPAYZ.io delivers a host of payment solutions that leverage the latest technological innovations and open access to the fastest growing emerging markets across Africa, Europe and Asia. Over the past year, there has been huge demand for its Open Banking and local payment method services, alongside bank transfers, mass payouts, online banking and e-wallets.

Yana Thakurta, Head of Business Development at SPAYZ.io commented: “We look forward to once again participating at iFX Dubai to expand our network of partners and clients. It’s a fantastic way to kick off the year, connecting with thousands of industry leaders from FOREX platforms to trading companies, and everything in between.

“Our key goal for iFX Dubai EXPO 2025 is to expand our portfolio of solutions and geographies. We’re using this as an opportunity to partner with like-minded entities who share our ambition to provide payment solutions that are truly global.”

Come meet SPAYZ.io’s team at the Trade Centre Dubai at Stand 64. You can also book a meeting slot with a member of a team.

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Airtm Enhances Its Board of Directors with Two Strategic Appointments

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Airtm, the most connected digital dollar account in the world, is proud to announce the addition of two distinguished industry leaders to its Board of Directors: Rafael de la Vega, Global SVP of Partnerships at Auctane, and Shivani Siroya, CEO & Founder of Tala. These appointments reflect Airtm’s commitment to innovation and financial inclusion as the company enters its next phase of growth.

“We are thrilled to welcome Rafael and Shivani to Airtm’s Board of Directors,” said Ruben Galindo Steckel, Co-founder and CEO of Airtm. “Their unique perspectives and proven track records will be invaluable as we continue scaling our platform to empower individuals and businesses in emerging markets. Together, we’ll push the boundaries of financial inclusion and innovation to create a more connected and equitable global economy. Rafael and Shivani bring a wealth of experience and strategic insight that will strengthen Airtm’s mission to connect emerging economies with the global market.”

Rafael de la Vega, a seasoned leader in fintech global partnerships and technology innovation, is currently the Global SVP of Partnerships at Auctane. With a proven track record of delivering scalable, impactful solutions at the intersection of fintech, innovation, and commerce, Rafael’s expertise will be pivotal as Airtm continues to grow. “Airtm has built a platform that breaks down barriers and opens up opportunities for people in emerging economies to connect to global markets. I am excited to contribute to its growth and help further its mission of fostering financial inclusion on a global scale,” said Rafael.

Shivani Siroya, CEO and Founder of Tala, is a pioneer in financial technology, renowned for empowering underserved communities through access to credit and essential financial tools. Her leadership in leveraging data-driven innovation aligns seamlessly with Airtm’s vision of creating more equitable financial opportunities. “Empowering underserved communities has always been at the core of my work, and Airtm’s mission resonates deeply with me. I’m thrilled to join the Board and work alongside such a dynamic team to expand access to financial tools that truly make a difference in people’s lives,” said Shivani.

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