Accenture expects Asian fintech investment to quadruple in 2015

4 Nov 201573 Shares

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When it comes to fintech, it appears that there is little stopping Asia becoming the leading continent when it comes to the sector, with a new report from Accenture stating it expects the region’s investment in the area to quadruple this year.

Just last month, James Lloyd wrote for Siliconrepublic.com, offering an insight into the Asian fintech scene from his base in Hong Kong, describing it as being on the cusp of the ‘Asian century’.

But now, Accenture has weighed in, with facts and figures that have shown a phenomenal growth  in investment in the sector in the last two years alone, from about $880m in all of 2014 to nearly $3.5bn in just the first nine months of 2015.

Of those companies analysed in the region, the largest percentage of companies originated in the payments (40pc) and increasingly in the lending market (25pc), which has for decades been effectively run by the bricks-and-mortar banks.

Despite the phenomenal growth in investment, the number of fintech company deals is only expected to increase marginally from 117 in 2014 to 122 in 2015 but, of course, the financial terms of these deals will be significantly higher.

Fintech investment in Asia over the past five years. Image via Accenture

Fintech investment in Asia over the past five years. Image via Accenture

Some of the big names expected to lead these deals will be investments from Alibaba Group Holding and its Ant Financial Services Group subsidiary into Paytm, a mobile payment and commerce platform in India, as well as fundraising efforts by Ping An Insurance Group venture Lufax.

“We are seeing the convergence of two trends: venture capitalists are clearly signalling that fintech is a growth opportunity and, simultaneously, financial services companies are waking up to the vast opportunities created by the current wave of fintech,” said Jon Allaway, senior managing director of Accenture’s Financial Services group in ASEAN.

The report also weighs in with regard to cryptocurrency with Blockchain being highlighted as helping banks, credit card companies and clearing-houses collaborate to create safer, faster accounting while reducing counter-party risk and transaction latency.

Finally, offering a warning to traditional banks in the region, Accenture’s financial lead in Asia, Beat Monnerat, said they could potentially be left behind.

“The increasing deal size should serve as a wake-up call to financial services companies in China and across Asia-Pacific that if they do not offer truly useful, customer-friendly digital solutions, competitors will step into the breach, not just on the retail front but also in commercial transactions,” he said.

Asian business image via Shutterstock

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Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com