Global financial techology deals more than double to US$5.9 b in second quarter: KPMG

SINGAPORE - Global investment into financial technology (fintech) companies more than doubled in the second quarter of the year, compared with the quarter before, to US$8.4 billion (S$11.4 billion) across 293 deals, KPMG said in a new report on Tuesday (Aug 1).

Much of this was due to mergers and acquisitions, which accounted for US$5.9 billion in deal value during the three months ended June 30.

Venture capital funding for fintech firms declined slightly from the first quarter to about US$2.5 billion.

Investment into fintech in Singapore more than tripled to US$61.5 million, although there were only four deals, compared with seven the quarter before.

The Monetary Authority of Singapore (MAS) continues to drive the majority of fintech activity here, KPMG said.

In the second quarter, MAS began to shift its focus from education and innovation to promoting technology adoption and attracting companies to launch offerings in Singapore, it added.

"Over the longer term, MAS hopes to see more fintechs using Singapore as a base to pilot and then deploy solutions into other countries within Southeast Asia, such as Indonesia and Thailand," said Mr Chia Tek Yew, the head of financial services advisory at KPMG Singapore.

"The success of these cross-border solutions could prove the viability of using Singapore as a springboard for Asia-based expansion."

Across Asia, total fintech investment remained relatively steady, with US$760 million invested across 51 deals during the second quarter, compared with US$790 million across 56 deals in the first three months of the year.

Blockchain is expected to remain a relatively hot area of investment across much of Asia, in addition to payments and lending, KPMG said.

Mr Chia said: "There seems to be a major push to transform Singapore into the world's blockchain leader, with an ever-increasing number of use cases in the country aimed at testing blockchain in government trade, land registry and tax functions, in addition to traditional banking and insurance."

In China, regulatory technology is also forecasted to attract more attention from investors, particularly related to anti-money laundering and digital identity management.

Interest in solutions related to financial inclusion is also expected to grow over the next few quarters, given the significant underbanked and unbanked populations in Asia.