17 May 2017 - 23:55
Huge potential for fintech market in Qatar: KPMG
The global financial technology (fintech) market in the first quarter of this year (Q1,2017) saw a total investment of $3.2bn across 260 deals, according to the Q1,2017 edition of The Pulse of Fintech – KPMG International’s quarterly report on fintech investment.
“In the US, the UK, China and other jurisdictions, fintech investors are starting to focus more on performance and return on investment than ever before – pressuring fintechs to demonstrate scalability and a clearer path to profitability,” said Ian Pollari, Global Co-Leader of Fintech, KPMG International, “At the same time, we’re seeing new fintech companies popping up in places you might not expect – like Poland and Slovakia – under-scoring fintech’s global diversity.”
Omar Mahmood (pictured), Partner and Head of Financial Services at KPMG in Qatar commented on the report and said “There has been a significant push to promote Qatar as a regional fintech hub. Qatar offers the right regulatory environment, extremely competitive operating costs, government support, funding support and a ready financial services sector to work with. We do see a lot of potential of fintech companies collaborating with financial services players to transform the financial services sector in Qatar and the region”.
He added: “We are also shortly launching a fintech survey with businesses in the financial services sector in Qatar which will benchmark the fintech strategies and readiness of Qatar based financial institutions with the rest of the world.”
The key highlights of the Q1,2017 Pulse of Fintech Report are: US continues to drive fintech investment, but myriad jurisdictions seeing success.
While the US led fintech investment in Q1,2017 , with $1.5bn across VC, PE and M&A, one of the strongest elements of the global fintech market is in the wide variety of fintech hubs that have developed around the world.
This quarter’s top ten global deals accurately portray the diversity of the global fintech market, with deals in the US, Canada, India, China, Sweden and the UK making the list. Even within the US, fintechs have succeeded in growing outside of Silicon Valley, with companies based in Delaware and Ohio making the top deals list.
Global fintech investors focusing on ‘performance’ over ‘potential. This increasing focus on performance over potential is a natural progression.
Investors that may have financed a wide range of investments seem to have now focused on making them work rather than increasing the size of their portfolio.
Q1,2017 saw a number of mature fintech companies and fintech investors focusing on expansion as a means to fuel growth, either geographically or through product or service expansion. Unicorn company,SoFi, is a great example of this. During Q1,2017 , SoFi acquired Zenbanx gaining the ability to provide more functions of a traditional bank, including customer deposits. SoFi also raised over $450m in order to fuel expansion into the Australia and Asia markets.
Partnership models gaining traction in fintech Corporates, who have continued to invest in fintech have also demonstrated increased interest in partnerships and alliances, in order to leverage the innovation potential of fintech.
Through partnership models, fintech companies can gain access to customers and customer data they may not be able to access independently. At the same time, corporates gain access to technologies and tools that can help them provide more attractive and cost effective solutions for their customers.
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