Asia has overtaken North America for investment in financial technology

The Asian financial and technology companies for seven months from the beginning of the year attracted investment of $9.6 billion, more than double the North American ($4.6 billion), the Financial Times writes, citing data from the consulting company Accenture. The Asian sector, 90% of Chinese companies first toured North American in terms of attracting investment.

In 2010, the North American FINTECH startups have collected 15 times more than Asian. Last year the volume of attracted North American investment companies have reached a peak of $14.8 billion, whereas the Asian has attracted more than three times less. In 2016, according to forecasts by Accenture, growth in North America will be halved.

Reduced investment in the North American FINTECH is due partly to the scandal leading to the US p2p lending Lending Club, notes the FT. Last year investment Bank Jefferies Group acquired via Lending Club loans by $22 million: the Bank received subprime loans, although the Declaration of the buyer is not provided. In addition, one of the staff Lending Club changed the date of issue 361 for the loan. As a result, the company began an investigation, and its shares plummeted in price. Analysts of consulting companies KPMG and CB Insights in its report “the pulse of the FINTECH sector”, published on 18 August, also attributed the reduction in investment in us FINTECH sector scandal with Lending Club, but also noted that investors were interested in the companies that use the latest technology insurance and distributed registers.

As the FT notes, mainly investment in Chinese FINTECH sector is not funds global investors cold to Silicon valley, and the state money that supports a small number of major financial and Internet companies in the country. For example, “daughter” of the Chinese leader in the segment of e-Commerce Alibaba Group company Ant Financial, which operates the country’s largest payment platform Alipay and other financial services — in April attracted a record for the Internet companies ‘ investments in $4.5 billion was Among the investors sovereign wealth Fund China Investment Corp, one of the “big four” banks, China Construction Bank Trust, investment company Primavera Capital Group and the largest insurance company of China China Life.

Causes of rapid growth

The Chinese financial technology sector over the past few years through aggressive growth, noted by McKinsey in its study. According to the company, China is now the world leader in number of users and the size of the market: “companies are popping up like mushrooms after a rain, their cost is growing, and consumer behavior changes significantly”. By the end of last year, the volume of Chinese Finance market, where the leading role is the payment sector exceeded 12 trillion yuan ($1.8 trillion).

This increase is due to four main factors, explains McKinsey. First, the government openly supports the segment. In 2013, the national People’s Bank of China has supported technology companies and urged them to concentrate more on the provision of financial services on the Internet. Secondly, China’s well-developed sector of online trading: online purchases make more than a third of the population. Thirdly, in China there is great demand for complex financial services: traditional players seek to reach the unreached with services, customer segments, and thus inferior companies that can seriously change the situation on the market. Fourth, says the company, high profitability of banks has created a culture that is not afraid to experiment, which is good for investment in digital services.

In anticipation of a slowdown

Such aggressive growth will inevitably slow down, say analysts at McKinsey. In their opinion, in the near future, Chinese financial-tech players will fight with each other, which will lead to consolidation companies. Regulatory changes, which will take into account the emergence of new companies and products, and their development will be more orderly.

“In the next five years will gradually see six new trends. Players should act quickly and decisively, to improve their skills and capabilities to take advantage of the exit of financial technologies at the global level,” notes McKinsey. Among these trends, the company provides mobile payments and money management, online consumer financing and small and medium enterprises, corporate Finance, cloud technology and infrastructure in the financial sector, big data and blockchain technology.