Asia-Pacific 2022 fintech investments up somewhat
Fintech investments in the Asia-Pacific region increased slightly in volume from US$50.2 billion on 1,604 deals in 2021 to US$50.5 billion on 1,227 deals in 2022, reaching a new record, according to a recent report. However, there were no M&A deals worth more than US$1 billion during the second half of 2022.
In the Asia-Pacific, wealth management targeting lower wealth segments also received some attention, providing unique investment opportunities to individuals not currently targeted by traditional wealth management companies, accounting firm KPMG’s Pulse of Fintech report finds. Investors and fintech alike are also focusing more on the development and growth of business-to-business (B2B) fintech offerings, with the payments sector continuing to attract the largest deals in the region.
The fintech environment has led to more fintechs in China looking globally for growth opportunities, the report notes. In 2022, for example, Ant Group launched Alipay+ Unified Payment – a cross-border digital payment app that allows consumers to pay for items at specific retailers in different countries (such as South Korea, Malaysia and the Philippines) using their digital wallet in local currency.
“In China, we are seeing more partnerships between fintechs and traditional banking players that are focused on enabling the traditional players to expand the services they offer to new customer segments, such as low-income earners and small businesses,” says Andrew Huang, partner. , head of fintech, KPMG China. “These partnerships will be critical in helping banks do more inclusive financing – which is a key priority heading into 2023.”
In the inclusive finance space, fintechs in China have partnered with major banks to provide the technology to allow them to better assess risks associated with small and medium business loans or loans to low-income individuals.
“The growth of digital banking, digital payments and crypto in various jurisdictions in recent years has driven significant investment in regtech [regulatory technology] aimed at ensuring that such transactions are accurate, transparent, reliable and compliant, adds Barnaby Robson, partner, deal advisory, KPMG China. “Recently, investors have shown very strong interest in companies that can offer multidimensional services.”
Looking ahead to the second half of 2023, Asia-Pacific jurisdictions such as Hong Kong, Japan, and Singapore, which already have strong cryptoregulatory environments, are attracting interest from crypto players and investors in the wake of the FTX meltdown.
Another trend to watch during the first half of 2023, the report notes, will be whether the post-IPO performance of 360 DigiTech, following its secondary listing in Hong Kong, helps improve the outlook for fintech exits in the region.
