Fintech Investment in Asia-Pacific Set to at Least Quadruple in 2015, According to Report by Accenture

Investments in monetary know-how (fintech) throughout Asia-Pacific skyrocketed in 2015 – from about $880 million in all of 2014 to practically $3.5 billion in simply the primary 9 months of 2015, in accordance to a brand new report by Accenture (NYSE: ACN).

The largest share of 2015 Asia-Pacific fintech funding offers have been in funds (40 p.c) and lending (25 p.c), which have historically been the only area of banks.

The report, “Fintech Investment in Asia-Pacific set to at least quadruple in 2015″, was launched at this time at the FinTech Innovation Lab Asia-Pacific‘s second annual Investor Day occasion at Cyberport in Hong Kong.

“We are seeing the convergence of two developments: enterprise capitalists are clearly signaling fintech is a progress alternative and concurrently monetary providers corporations are waking up to the huge alternatives created by the present wave of fintech,” says Jon Allaway, senior managing director of Accenture’s Financial Services group in ASEAN and government sponsor of the FinTech Innovation Lab Asia-Pacific. “Financial providers establishments are embracing cloud know-how, cell wallets and blockchain to essentially redefine their enterprise and operational fashions. We are seeing this in the elevated investments from banks in fintech enterprise capital funding, incubators and startups.”

According to the report, the quantity of offers is about to enhance barely — at 122 as of October 1, in contrast with 117 for all of 2014 – however the worth of offers has elevated considerably due to bigger investments in and from China. They embrace investments from Alibaba Group Holding and its Ant Financial Services Group subsidiary into Paytm, a cell cost and commerce platform in India, in addition to fundraising efforts by Ping An Insurance Group enterprise Lufax, which has been creating a number of different financing and funding platforms, together with peer-to-peer and business-to-customer platforms.

“Major non-traditional monetary providers corporations have been investing in fintech funds in China for the previous 12 months,” says Beat Monnerat, senior managing director at Accenture and the corporate’s Financial Services lead in Asia Pacific. “The growing deal dimension ought to function a wake-up name to monetary providers corporations in China and throughout Asia-Pacific that if they don’t provide actually helpful, customer-friendly digital options, opponents will step into the breach not simply on the retail entrance but in addition in industrial transactions.”

Banks ought to deal with developments in Blockchain, Cloud and Cybersecurity

Financial providers companies are additionally now turning to fintech for assist in streamlining operations, complying with altering laws and new currencies. Indeed, Accenture forecasts that blockchain, the underlying distributed ledger know-how that helps the alternate of crypto foreign money and cryptographically secured monetary property, will more and more be a magnet for startups, banks and traders. As a stand-alone know-how, blockchain may assist banks, bank card corporations and clearinghouses collaborate to create safer, sooner accounting and optimize capital use by decreasing counterparty threat and transaction latency.

Another fintech alternative price watching is the affect of cloud on this trade. As cloud adoption positive aspects momentum, banks are starting to establish which information may be hosted in the general public cloud and which information must be maintained in a personal cloud. Banks can fulfill regulators by preserving delicate buyer information extra securely in a personal cloud, whereas nonetheless profiting from the effectivity, flexibility, on-demand capabilities and decrease prices cloud can provide. This creates alternatives for fintech startups to develop new providers tailor-made across the cloud.

Accenture additionally expects funding in cyber safety to enhance considerably in the approaching 12 months, particularly in mild of current large-scale information breaches reported in the media.

“Identifying potential areas for extra fintech innovation is a key operate of our fintech labs,” says Allaway, who spoke at the Investor Day occasion. “For startups, the chance is unparalleled: they get to hear from 12 totally different banks on what these banks want; for the banks, the mentoring helps them establish options which can be coming to the market quickly which may be in a position to assist them serve their prospects higher.”

In its second 12 months, the FinTech Innovation Lab Asia-Pacific is modeled on an analogous program that was co-founded by Accenture and the Partnership Fund for New York City in 2010. Since that point, Accenture has launched different FinTech Innovation Labs in London (2012) and Dublin (2014). The New York FinTech Innovation Lab‘s 31 alumni corporations have raised greater than US$175 million in enterprise financing after taking part in this system, and 4 contributors have been acquired, two in 2015 alone, together with Standard Treasury and BillGuard. The 21 corporations that handed by the London program in the primary two years raised greater than US$35 million in new investments, signed practically 50 contracts to do enterprise with banks, and elevated revenues by 170 p.c, on common. Participants in the Asia-Pacific Lab have to this point raised greater than US$26.5 million.

Methodology

This report is predicated on Accenture’s evaluation of fintech investment-data from CB Insights, a world enterprise finance-data and analytics agency. The evaluation consists of international financing exercise from enterprise capital and personal fairness companies, companies and company enterprise capital divisions, hedge funds, accelerators and authorities backed funds from 2010 by 2014. Fintech corporations are outlined as people who provide applied sciences for retail, industrial and funding banks, insurers, asset managers and cost providers suppliers in addition to different suppliers of monetary providers (e.g. P2P platforms and digital currencies exchanges). Accenture Research has reclassified CB Insights offers by its proprietary methodology, figuring out seven totally different product classes (lending, funds, markets, wealth administration, insurance coverage, threat and safety and different) to consider the extent of funding change in these segments of the monetary providers sector. The listing of offers included are dynamic and continually altering, as new corporations are added to the database; all publicly identified fund raises for an organization, which might embrace earlier rounds, are again stuffed into the database.

This report offers the Asia angle of the evolution of fintech. For extra about what is going on in the US market see: Fintech New York: Partnerships, Platforms and Open Innovation.

About Accenture
Accenture is a world administration consulting, know-how providers and outsourcing firm, with greater than 358,000 folks serving shoppers in greater than 120 international locations. Combining unparalleled expertise, complete capabilities throughout all industries and enterprise capabilities, and intensive analysis on the world’s most profitable corporations, Accenture collaborates with shoppers to assist them grow to be high-performance companies and governments. The firm generated web revenues of US$31.0 billion for the fiscal 12 months ended Aug. 31, 2015. Its dwelling web page is www.accenture.com.

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