UK FinTech deals reach six year high

Investment in the UK’s FinTech sector nearly doubled last year to $48.5 billion, as the boom in digital banking services continues.

According to KPMG’s Pulse of FinTech report, investment in British FinTech companies was up 91 per cent from a year earlier, when companies drew in $25.4 billion.

The number of UK deals was the highest in six years, which contrasted with a slight slowdown in global investment, which stood at $135.7 billion invested across 2,693 deals.

Global tech giants such as Alibaba Group, Alphabet, Apple, Baidu, IBM, Microsoft and Tencent led the field in FinTech investment, with $3.5 billion invested across 46 deals in 2019, while cross-border mergers and acquisitions (M&A) remained strong at $54.2 billion in deal value – despite ongoing global trade tension.

On a global scale, several sub-sectors saw gains in funding. PropTech investment grew from $1.9 billion in 2018 to a record $2.6 billion in 2019, while FinTech-focused cyber security investment more than doubled from $316.9 million to $646.2 million.

Blockchain and cryptocurrency investment continued to fluctuate, falling from $6.3 billion to $4.7 billion year-on-year, although Facebook's announcement of Libra and the People's Bank of China's announcement of accelerated research and experimentation on digital currency led to renewed interest in these technologies.

Europe set a new record for FinTech funding, attracting $58.1 billion in investment compared to $43.4 billion in 2018, with the $42.5 billion acquisition of WorldPay by FIS accounting for more than half of this number.

Anton Ruddenklau, global co-leader of FinTech at KPMG International, said: "Over the past year, the lines have really started to blur between financial services and non-financial services – with FinTech companies helping to bridge the gap.

"It's a trend that will only continue into 2020. Just look at how the big tech giants are working with both traditional financial institutions and FinTechs in order to seamlessly integrate financial services within their ecosystems, and at how the larger FinTechs and financial institutions are looking at ways to broaden their offerings into adjacent areas."

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