Banks bankrolling fintechs
Global investment in fintech companies jumped by more than 50 per cent last year and a substantial portion of that investment was made by banks - supposedly the businesses being put at risk by fintech disruptors.The Pulse of Fintech, a report prepared by KPMG and CB Insights, shows that global debt and equity investment in fintech hit US$19.5 billion last year - a 56.6 per cent increase over the US$12.1 billion invested in the sector in 2014.Venture capital investment accounted for US$13.8 billion of the total. VC funds made 653 investments in fintech companies last year.KPMG Australia partner Ian Pollari, who is the global co-leader of fintech for KPMG International, said a significant development has been the involvement of corporate VC - the venture capital arms of large companies, such as Westpac's Reinventure.Corporate VC accounted for around 25 per cent of venture capital investment in fintech's last year.Many of those corporates are banks, with Citigroup, Goldman Sachs and JPMorgan Chase leading the way.Pollari said: "Over the past year, there has been a shift as banks have moved from seeing fintech companies as disruptors to co-creators. Banks are increasingly collaborating with fintechs to embed new services and technologies that improve customer experience and drive efficiency."The main areas of investment were in payments and lending, with blockchain and bitcoin also receiving plenty of attention.