A recent study from consulting firm Accenture shows rapid growth in investment in the FinTech sector. Venture capitalists, private equity firms, corporates and a number of other players have poured an unprecedented amount of money in the global FinTech start-ups.
“The FinTech scene’s innovative drive reaches far beyond the world’s traditional financial centres,” explains Friederike Stradtmann, Senior Manager at Accenture Strategy for the areas financial services and digital business models. According to the study, investment has reached $22.3 billion, a 75% increase compared to the previous year. The share of investment in Europe and Asia, now at 62%, has nearly doubled. Accenture’s analysis shows that the growth his being primarily driven by America, Asia and Europe. In 2015, investment in China grew by 445% to $1.97 billion, followed by India with $1.65 billion. In Germany, the investment volume grew by 840% to $770 million.
Even though there are currently more disruptive FinTechs than cooperative, the analysis does show a growing trend towards cooperation between financial institutions and the start-ups. Disruptive FinTechs brand themselves as competition for the established players in the financial sector, while the cooperative FinTechs offer innovative solutions for existing firms. Investment in collaborative FinTechs grew by 138% in 2015, now totalling 44% of all FinTech investment.
The study’s conclusions stress that banks must make short and long-term plans for transforming their business models to keep up with digital trends. The study poignantly states, “Banks should place themselves closer to the center of their customers’ digital lives, embedding customer-centric thinking at the core of the corporate strategy along with the right skillsets at every level of the organization.”
The complete study can be found on the Accenture website.