The global fintech ecosystem continued to mature at an accelerated pace over the course of 2018. With big developments ranging from the rise of open banking, increasing regulatory clarity and maturation of AI and blockchain, 2019 promises to be another big year for fintech.
Here are our top 10 predictions for 2019:
- Consolidation: In 2019 we will see increasing levels of consolidation in mature areas such as payments and lending, as well as emerging areas like blockchain – as startups look to scale and fuel international growth.
- Bigger deals: Deal sizes are expected to continue to grow in 2019, as investors focus on later stage fintechs with a proven track-record in an effort to reduce risk.
- Global expansion: Challenger banks will continue to grow their service offerings and expand across international borders.
- Open banking: Regulations around open banking – in Europe and elsewhere – will prove to be a boon for technology giants and startups alike as they increasingly play a role in financial services.
- Blockchain: There will be a dramatic increase in levels of investment in companies dedicated to building specific products and solutions based on blockchain technology.
- Insurtech accelerates: Asia will see substantial growth in insurtech investment, in part by US and Europe-based traditional insurers looking to use Asia to test alternative insurance offerings.
- Regtech rises: Investments in regtech will accelerate in 2019, as startups focus on helping incumbent financial institutions reduce costs associated with complying with increasingly stringent regulations.
- Financial institutions: Corporate investment will remain strong, with an expected increase in partnerships in particular due to open banking and also for investments to continue to form a core part of M&A strategies for incumbents.
- Collaboration in Asia: Collaboration between fintechs and banks in Asia is expected to continue to grow, particularly in areas like KYC, AML and digital identity management – including facial recognition and voice recognition.
- Digital banking: Traditional banks and corporates will increasingly expand into digital banking, introducing nimble, standalone digital banks that operate independently and do not rely on their existing legacy systems
Contact your local KPMG advisors to discuss these trends and what they mean for your business.