Fintech Industry Trends
Technology has been an increasing challenge and threat to traditional financial services that were once highly dependent on salespeople, desktops and large institutions. FinTech democratizes complicated and institutional processes and moves towards mobile services. It provides faster, less expensive, and more secure service.
According to KPMG, global investment in fintech companies in 2018 hit $57.9 billion across 875 deals, nearing the previous annual record of $62.5 billion set in 2015. Among them, US remained the largest market for deals, with 659 investments worth $11.89 billion funding — both a new annual high. Although the numbers for the full year aren’t out yet, it’s safe to say that 2018 was a standout year for the FinTech industry.
In terms of sectors in the FinTech industry, some of the most active areas were:
- Cryptocurrency and digital cash
- Blockchain/smart contracts
Specifically, as for automation technology, 11% of financial services institutions have viewed themselves as having adopted robotic process automation widely across the organization by the end of 2017. McKinsey has predicted that machines will be responsible for completing 10-25% of bank work in the next few years as the second wave of automation and AI emerges. Mobile banking is another growing sector in the FinTech industry – it processes over a billion dollars a day. Furthermore, in the insurance space, startup Oscar raised $165 million of investment in 2018.
Investor demand continues to be strong for mobile banking, data/analytics, decentralization, B2B for banks, business apps, and B2C for small businesses and consumers.
Castle Placement is actively raising capital for FinTech companies. Please let us know if you would like to discuss your capital raise.