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China emerges as fintech powerhouse as UK dominance weakens

25 October 2016  |  12495 views  |  0 Chinese Flag

The UK's position at the centre of the fintech world is under threat as its top companies become overshadowed by Chinese giants, a new report from KPMG and H2 Ventures suggests.

UK firms occupy 13 places in the annual Fintech 100 report, behind only the US but down on the 18 they held in 2015. Just one British firm - Atom Bank - makes the top 10. Meanwhile China has eight firms in the 100, but four of these - Ant Financial, Qudian, Lufax and ZhongAn - are in the top five.

The list is split between 50 established players and 50 emerging, with ranking based on five factors: total capital raised, rate of capital raising, geographic and sector diversity, traction, and the x-factor.

The report suggests that it is not just China challenging the dominance of established markets such as the UK and US. Firms from 17 countries make the top 50 established list, up from 13 in 2015, with new entrants from France, Mexico, South Africa and Singapore.

Toby Heap, H2 Ventures, says: "The continued dominance of China, which rapidly rose last year to take the top spot, tells only part of the story. We are seeing the emergence of exciting fintech players in countries across the world, from India to Israel, from Portugal to the Philippines."

The level of funding has continued to rise for the Fintech 100, with the 50 established companies attracting an additional US$14.6 billion of capital since last year’s report, an increase of more than 40%.

Disrupters dominate, with nine of the top 10 taking on established sectors, with lending to the fore, accounting for 32 of 100 list members. Insuretech and regtech are also becoming more prominent, accounting for 12 and nine members, respectively.

Ian Pollari, global co-lead, KPMG’s fintech practice, says the report "highlights a growing and increasingly diverse fintech sector, with the creation of value in new sub-sectors such as regtech and data & analytics, and the continued growth in insurtech and blockchain".

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