Diversity grows in the finance world

According to the part of KPMG’s regular ‘Pulse of Fintech’ report, which examines the first half of 2021, the fintech ecosystem continues to grow. Global fintech investment continued to evolve in the first half of 2021, growing from 87 billion to 98 billion USD. Fintech deal volume also set a new record with 2,456 in the first half of 2021. Deal volumes increased across a wide range of fintech sub-sectors, from wealthtech and regtech to crypto and cybersecurity. Global venture capital investment exceeded 52 billion USD in the first half of 2021, close to the annual record of 54 billion USD last seen in 2018. KPMG Turkey Fintech Industry Leader Sinem Cantürk said that: “The global fintech industry has made a strong start to 2021 and ‘diversity’ is at the forefront. The payments industry is in the top spot for fintech investments this year. While the size and diversity of deals drives global insurtech investment, increasing interest in regtech investment is also at the forefront. Wealthtech enjoyed success among venture capital investors in the first half of the year as cybersecurity investments continued at record pace.” Highlights from the report are:

• The Americas is the strongest with 51.4 billion USD in fintech investment. The USA, on the other hand, has almost half of the global total with an investment of 42.1 billion USD.
• There is an investment of 39.1 billion USD in the EMEA region. Open banking regulations have fostered accelerated fintech adoption in the EMEA region, improved third-party access to data, and fostered a collaborative environment in areas such as embedded finance. The investment value in the Asia-Pacific region, which was 4.5 billion USD last year, reached 7.5 billion USD in the first half of 2021.
• Global merger acquisitions totaled 10.3 billion USD in 2020, reaching 27.7 billion USD in the first half of 2021. Due to the recession caused by the pandemic, many companies preferred to expand their service area with cross-border mergers and acquisitions. As examples, the London Stock Exchange bought data analytics firm Refinitiv for 14.8 billion USD and Nasdaq bought Canadian-based financial fraud detection firm Verafin for 2.7 billion USD.
• The payments industry ranks top for fintech investments globally. This was lead by the 2.4 billion USD SPAC merger by US-based SoFi, the 1.4 billion USD SPAC merger of the UK-based Paysafe Group, and two venture capital funding rounds.
• Many non-financial companies have begun to expand their reach into payments and financial services. For instance, in the first half of 2021, IKEA purchased a stake in Ikano bank to provide consumer banking services. Walmart announced its partnership with Ribbit Capital to create a fintech to offer digital financial products. Walgreens has announced a partnership with MetaBank to offer in-store and online bank accounts.