The FinTech sector has been on fire over the course of recent months and it looks like that trend will continue for quite some time. Part of that success can be attributed to the interest of banks in FinTech solutions, as the financial sector is prone to disruption. More investment funds are expected to flow in over the next few month, most of which will be coming from Chinese firms.
Chinese FinTech Startups Are The Next Hot Thing
Earlier this year, Chinese startups started showing a growing interest in the FinTech industry. This comes as quite a surprise, considering China is not too keen on competing payment services for the time being. With the Chinese Yuan devaluing as we speak and capital controls being in effect, citizens are looking for ways to move funds in and out of the country by other means.
As a result of this renewed interest in FinTech, several Chinese startups made it to the 50 Established Innovators list. In fact, ZhongAn made it to the top of that list, with fellow Chinese FinTech startup Qufengi taking the fourth position. With seven companies representing China in the FinTech 100, it goes to show that FinTech is an emerging trend in the country.
Most of the companies making up the FinTech 100 are located in the US, Emea, UK, and Asia-Pacific regions. It is worth noting how Australia and New Zealand are showing an increased focus on FinTech as well this year, making the industry an interesting sector to keep an eye on over the next few years.
Similar to most other countries around the world, Chinese FinTech startups are mostly focusing on disrupting the payment sector. Most of the companies in the financial technology and financial services segments focus on currencies and transactions in general. This trend also translates to the Fintech 100, where one in four companies is working in some way to disrupt the payments sector.
KPMG’s Global Co-lead Ian Pollari stated:
“It is positive to see the development of the fintech ‘enablers’, which are seeking to provide services and capabilities to financial institutions. This needs to form a core part of how incumbents seek to respond to the threats and opportunities that come from disruption.”
The Future of FinTech In China
China is and remains an interesting country regarding FinTech and FinServ. It is the last country that comes to mind when people talk about disrupting finance. However, a fair share of VC funding in the financial industry is originating from China, so it only makes sense to see local startups compete for a piece of the funds.
Additionally, there is another trend gaining a lot of momentum, which is the insurance industry. Regarding investment, a lot of VC’s are putting their eggs in this basket, as insurance is another market that needs to evolve in the very near future. Not too many Chinese FinTech startups are active in this space just yet, but that scenario will most likely change in the near future.
What are your thoughts on the FinTech sector in China? Let us know in the comments below!
Images courtesy of Shutterstock, China FinTech