China's fintech investment moderates in second half

 Investment in China's financial technology sector from mergers and acquisitions, private equity and venture capital deals dipped to US$962 million in the second half of last year. 

The country also saw less active investment in 2019 with total deals of US$4.47 billion, compared with US$26.1 billion a year earlier, according to KPMG’s Pulse of Fintech report.   

Fintech investment globally remained high in 2019, with over US$135.7 billion invested in the sector, picking up from US$111.8 billion in 2018.

The payments space is expected to heat up with larger deals as more fintechs look to scale, the report points out. Corporate investment is also expected to remain high as traditional companies look to improve their customer-experience and embrace innovation within their operations and product offerings.

China-based investors are gaining interest in fintech startups which use technologies more broadly to improve the operations of banks and financial institutions. 

Financial technologies in the regulatory fields have also become a more attractive area to investors in China, as new businesses leverage artificial intelligence and machine learning to assess risks and identify fraud are gaining popularity. 

"We anticipate increased regulation and guidance for the industry and an enhanced infrastructure to support fintech development," commented Chris Wang, partner and head of Fintech at KPMG China.  

China’s large technology giants, which are the dominant leaders in the payment space, continued to focus on growing their reach geographically, making investments outside of their home market. 

Ant Financial submitted an application for a digital banking license in Singapore late in 2019, while Tencent took a stake in Argentine digital banking startup Ualá.