- Cross-border M&A remains strong at $USD54.2 billion in deal value – despite ongoing global trade tension
- Fintech deals by global tech giants on the rise with $USD3.5 billion invested across 46 deals in 2019
- $USD135.7 billion in global fintech funding in 2019, including record-setting $USD77.1 billion in Q3'19
The main theme for 2019's global fintech market was diversity – with fintechs and fintech investment expanding across product, sector and geographic borders. The expanding definition of fintech and its increasing reach and interconnectivity helped keep fintech investment robust despite the global economic and trade challenges that hindered growth in 2019, including concerns related to Brexit and ongoing trade tensions between
In fact, despite these concerns, cross-border transactions remained high with
Many niche areas of fintech continued to grow and evolve throughout 2019; in particular, proptech investment grew from
“Over the past year, the lines have really started to blur between financial services and non-financial services – with fintech companies helping to bridge the gap,” said Anton Ruddenklau, Global Co-leader of Fintech,
2019 Key Global Highlights
- Global fintech investment fell short of 2018's record year, with
$137.5 billioninvested in 2019 compared to $141 billionin 2018.
- Global fintech M&A rose from
$91 billionin 2019 to a record-high of $97.3 billionin 2019, despite a strong drop in the number of M&A deals from 622 to 426.
- Global corporate VC investment participation rose during every quarter of 2019, leading to
$16.7 billionin total annual VC invested with CVC involvement; CVC-related deal volume was also robust, with 553 deals over 2019, including 166 in Q3'19 – the second-highest quarter ever in terms of CVC fintech deals volume after Q2'18.
- Cross-border M&A held strong at
$54.2 billionin deal value – despite ongoing global trade tension.
- The number of fintech deals by global tech giants – including
Alibaba Group, Alphabet, Apple, Baidu, IBM, Microsoft and Tencent – increased for the fifth straight year, with $3.5 billioninvested across 46 deals in 2019.
- Cybersecurity related fintech investment more than doubled year-over-year, from
$316.9 millionto $646.2 million.
- Proptech investment rose to a record high of
$2.6 billionin 2019 from $1.9 billionin 2018.
Regional Highlights – 2019
The US set a new record for fintech funding in 2019, with
Fintech investment in the
Fintech investment in the
2020: Bigger, bolder deals and blurring lines
In 2020, the lines are going to continue to blur between financial services and non-financial services – with big techs like Alibaba, Tencent, Google and others continuing to look for ways to integrate financial services within their ecosystem of offerings to their customers. Integration will be a big priority and the unbundling of financial services that has occurred over the past few years will likely start to reverse as fintechs, traditional financial institutions, and big techs look to provide more value and more seamless experiences to their customers.
“2020 is going to be an exciting and pivotal year for fintech, particularly as we start to see the impact of the digital banking licensees in
Key Predictions for 2020
- The big tech giants like Alphabet, Alibaba and Tencent will increase their focus on the fintech space, both working to increase their reach into developing markets and to increase the value and seamless of their ecosystems to their customers.
- Maturing fintechs and challenger banks will continue to expand the breadth of their service offerings beyond their initial niche focus areas and make strategic moves across international borders.
- The unbundling of financial products will begin to reverse course as consumers increasingly seek a primary interface to manage all of their financial affairs on a holistic level.
- Cybersecurity-focused fintechs will become more attractive as traditional financial institutions shift from building to buying cyber solutions, particularly in areas like fraud, security, and identity management.
- Consolidation is going increase, with bigger and bolder M&A deals becoming the norm in more mature fintech sub-sectors.
- Building on the momentum of
Hong Kong(SAR) and Australia, more countries in the Asia Pacificregion will develop digital banking regimes and use digital banking licenses to guide digital bank efforts.
- The focus on open data opportunities will move beyond banking and into other aspects of the financial services industry.
*All figures cited are in USD