China the Rulers of Asian Fintech

Asia experienced a solid increase in fintech investment in the third quarter of 2107, but the U.S. still leads the pack.

Total global financial technology funding continues to remain strong with $8.2 billion invested in the third quarter this year according to the latest KPMG Pulse of Fintech report.

Although deal volume declined, during the third quarter investment was well above the $6.3 billion raised for the same period last year. The U.S. led global fintech investment in the third quarter with $5 billion deployed across 142 deals. 

China Leads Asia 

Asia experienced a solid increase in fintech investment with $1.21 billion raised across 41 deals. Venture Capital (VC) funding was up accounting for just over $1 billion in investment. China however accounted for over half of Asia fintech investment at $745 million.

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Corporate participation in Asia fintech VC deals remained high at 22 percent of overall round counts, although actual direct investment has been quite minimal in 2017 with just $840 million invested year-on-year in associated deal value.

Singapore Continues to Evolve

The Monetary Authority of Singapore (MAS) remains a driving force behind the country’s fintech ecosystem. During the third quarter investment into financial technology in Singapore was $25.3 million over 6 deals. The upcoming Singapore Fintech Festival could also be a catalyst for deals and will further raise the profile of fintech in the city-state.

With 2018 a key year for Singapore’s Smart Nation 2020 strategy, the MAS’s focus on innovation is only expected to grow. One major priority for the MAS has been blockchain. To date, it has launched 10 blockchain projects – moving them through concept development to proof of concept. In 2018, some of these initiatives are expected to go to pilot, with the hope of implementation prior to 2020.

Trends to Watch in Asia

Over the next few quarters, investments across Asia are expected to grow as more traditional corporates look to make strategic investments. The entire fintech ecosystem in Asia is also expected to expand as additional fintech hubs arise in different jurisdictions.

Thailand for example has been attracting fintech firms throughout 2017. In 2016 The Bank of Thailand announced it would open the way for financial technology product experimentation under its «regulatory sandbox».