China ranked second in the world for fintech investment in the first half of 2018 according to a new report from KPMG.
The KPMG Pulse of Fintech report indicates that global fintech investment reached USD$57.9 billion in the first half of the year across 875 deals, ahead of the full year total for 2017.
The UK attracted the greatest amount of investment at $16.1 billion, with China in second place at $15.1 billion followed by the US in third with $14.2 billion.
China was host to the biggest fintech deal in the first half of the year with Ant Financial’s 14 billion Series C funding round, which accounted for over half of the $23 billion in VC global fintech funding during the period.
There were also four other Chinese funding rounds in excess of $100 billion during the first half, including Dianrong ($290 million), Wecash ($160 million), Meili Jinrong ($130 million) and Tiantian Paiche ($100 million).
According to the report China’s banking sector is a key driver of the country’s fintech developments.
“The majority of banks in China have been expanding their focus to digital and developing transformation strategies,” said the report.
“This has led to an increase in B2B focused fintechs able to enable banking transformation…banks have invested in myriad areas, including blockchain, big data and AI.
“WeBank in China is implementing a production blockchain system to provide syndicated lending capabilities; the solution is currently being used by three mid-tier banks.”
The report also points to strong enthusiasm amongst China’s incumbent tech giants for fintech’s potential.
“In China, a number of large tech players have made inroads into the provision of innovative financial services as part of their value proposition.
“These technology firms have framed their offerings as a way to extend value to their customers, rather than as a desire on their part to actively seek a role in the financial services market.”