2015 Pulse Of Fintech Report: The Industry Is 'Maturing'
Last week, KPMG released its 2015 Pulse of Fintech report, chronicling the year's global Fintech investment and expansion. Fintech saw nearly $14 billion in investment over 653 deals globally in 2015.
Two key trends emerged in their findings: funding to VC-backed companies more than doubled from 2014 to 2015, and corporate entities took part in more than 25 percent of all Fintech deals. These moves indicate that Fintech is now a major force in the finance world, as corporate entities begin to co-opt disruptors into their portfolios.
Deals Down, Funding Up
The total number of Fintech deals in the U.S. decreased by 15 from 2014, but funding for those deals increased 72 percent.
"Fewer, larger deals is an indication that the market is maturing," said KPMG Fintech co-head Warren Mead in a comment to Benzinga.
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That maturity showed in a short drop in fourth-quarter deals in the U.S., but North American Fintech activity accounted for half of the worldwide total.
Fintech in other markets proved incredibly robust. European Fintech received its second straight year of more than $1 billion in investment. Corporate entities were involved in 40 percent of all Asian deals, where Fintech companies are looking into under-banked and unbanked markets for expansion.
American companies were also looking to make inroads in new markets, as Fintech companies sprung up to meet the needs of the millennial generation, which is seen to mistrust financial institutions.
"Millennials are of course mindful of cost, but primary drivers tend to be convenience, channel and value add - this will require a different type of Fintech," said Mead. "It also lends itself better to 'enablers' as the incumbents, with their significant customer base, are keen to collaborate with Fintech companies."
These tappable markets, in conjunction with high investment throughout Fintech globally, "highlight a growing mindset shift in banking to look at Fintech companies more as enablers than disruptors," according to the report.
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