fintech-ecosystem-2019

Analyzing Fintech’s Ecosystem in 2019

The rise of Fintech has certainly left a big mark on the world in general. More and more jobs, opportunities and markets are being created globally thanks to the disruption of the traditional finance industry. Undoubtely, the emergence of any market gives rise to a new ecosystem.

What is the Fintech Ecosystem

According to Ernst & Young Singapore’s “Fintech Ecosystem Playbook”, a Fintech ecosystem consists of “consumers, financial institutions, FinTech startups, investors, regulators and educational institutions.” The growth of such an ecosystem depends on individuals with the knowledge of how to take it forward. However, in the case of Fintech, it is still early days as there is a lack of qualified talent within the industry that have the requisite expertise needed to execute Fintech projects. Another challenge is getting financial institutions and startups to collaborate with each other, either on a consulting basis or even through mergers and acquisitions to accelerate growth. The E&Y report also notes that “development is particularly distinct in emerging markets where financial services present unique opportunities and challenges” which is evidenced by the huge growth in markets in various regions of Asia and South America

Fintech Ecosystem in 2018

If last year’s numbers are anything to go by, the global Fintech ecosystem is growing at an extremely healthy rate. 2018 saw Fintech investment by venture capitalists reach US$32.6 billion across 1,164 deals by Q3, largely thanks to a jaw-dropping US$14 billion funding round raised by China’s Ant Financial. Out of the total figure, North America accounted for the bulk of investments which made up US$9.3 billion, while Europe accounted for US$2.7 billion and Asia contributed US$6.1 billion, excluding the Ant Financial deal. The amount of Fintech funding raised worldwide from all sources was a whopping US$111.8 billion according to KPMG, including mergers and acquisition. In addition, the figures above also highlight the rapid growth across various regions in Europe, as well as emerging markets in Asia.

Fintech Ecosystem 2019

The first half of 2019 has seen a slow down in the number of Fintech deals closed, with US$37.9 billion of investment raised globally across 962 deals. This marks a downward trend according to KPMG, which is a big downturn from the huge deals of 2018. However, there are large M&A deals on the horizon, which could reverse the current trend. Investors continue to place confidence in US Fintechs, with a total of US$18.3 billion raised across 470 deals, while strong deals closed in France, Argentina, Canada, China and Germany highlight the diversity of regions that are bullish on Fintech. It’s also pertinent to note that the Fintech ecosystem in Africa has raised US$320 million since 2015, and grown 60% over the past two years, showing how much potential there is in targeting emerging markets around the world. Out of US$334.5 million raised by African tech startups, Fintechs led the way and accounted for just under 40% of total funds with. The main markets in the region belonged to South Africa, Nigeria and Kenya, making up for 65.2% of Africa’s Fintech startups.

Fintech In the UK

The UK continues to be one of Europe’s leading hubs when it comes to Fintech, with many considering London the Fintech capital of the continent. Despite Brexit looming in the not-so-distant future, investors continue to be bullish on the prospect of Fintech in the country which bodes well for the growth of the ecosystem. According to the Fintech Times, deal volume in 2019 has dropped by 30% year-on-year so far, which is in line with a down trend that began in 2018. However, the value of individual deals has been much larger which is an indicator that the UK Fintech is continuing to grow and mature.

How many Fintech Companies in the U.K

Currently, there are over 1,600 Fintech companies in the UK and it's estimated that this figure will more than double by 2030. The UK Fintech adoption rate is currently at a healthy 42%, above the global average of 33%. In addition, 82% of incumbents expect to increase the number of Fintech collaborations in the next three to five years, which is a good indicator that the Fintech ecosystem is set for several years of continuous growth.

How many Fintech Companies in London

Unsurprisingly, London is the main hub for Fintech in the UK with 80% of the country’s 1,600 Fintech firms setting up shop in the capital. Furthermore, the diverse pool of talent in the city’s ecosystem encourages investment for new startups to sprout and flourish. This is reflected in the numbers, with a whopping 85% of accelerators joined by UK Fintech firms based in London.
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London is widely recognised as the Fintech capital of Europe. Image from openbusinesscouncil.org

Fintech Ecosystem In Singapore

In 2018, Fintech investments in Singapore more than doubled to reach US$365 million, an increase from the US$180 million raised a year prior. This places the island-state among the leaders in Asia’s Fintech market according to fund raised, behind Australia, China, India and Japan.

There is also much potential for further growth. The Singapore government offers attractive incentives to VCs to encourage investment in burgeoning Fintech startups, including less regulatory red tape, intellectual property protection and even allocation of monetary support for early investments.

How many Fintech Companies in Singapore?

Singapore is widely considered to be one of Asia’s leading Fintech hubs, and is rapidly growing year-on-year. Around 490 Fintech startups are based in the country according to a 2018 Fintech census, making it by far the largest ecosystem in South East Asia
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Image from medium.com/@gomedici

Fintech's Ecosystem in 5 years

Recently, CFTE released an all-encompassing report that takes a look at how the top 50 Fintech firms back in 2014 have performed in the five years since. Collectively, the group has had a strong impact on the Fintech industry with highlights including:

A bankruptcy rate of just 4% among the Fintech 50, which is much lower than the expected failure rate of 17 out of 50 among US startups One in four of the Fintech 50 are worth at least US$1 billion today The Fintech 50 collectively have over 319 million clients between them, which is more than Citi, Bank of America and HSBC combined

As our most ambitious project to date, the report also analyses several factors of success as well as a general Fintech industry overview. This includes rapid user acquisition and client retention and monetisation, while also taking into account the impact the firms have had in the industry, including client growth, equity raised, employee growth, valuation, and more.

How to Join the Fintech Ecosystem

The emergence of various Fintech courses, both online and offline, serve to highlight both the growth and impact of the Fintech industry on the world. However, the raid growth of the industry has not been matched with the number of talents qualified to work in the field. Due to the relatively recency of the FIntech industry, there is currently a shortage of employees in the market with the relevant skill set. This lack of talent has created a gap in the market, and is an opportunity for new graduates or experienced finance professionals looking for a career boost.
"The Number of Fintech Jobs in the UK market increased by 61% in 2018"
According to global recruiter Robert Walters, the number of Fintech jobs in the UK market increased by 61% in 2018, while the high demand also increased average salaries by up to 25%. Fields that saw an increase in demand for Fintech knowledge included compliance (85%), marketing (63%), sales (23%) and development and engineering (16%), highlighting how Fintech has has a huge impact on the job market as a whole.

Online Fintech Courses

Offering an overview of Fintech in general, the CFTE Fintech course helps learners gain a foundational understanding of Fintech, what it encompasses and how it is impacting the world in a big way. It also covers all the aspects highlighting the importance of financial technology, and you will learn about the various technologies used by both startups and financial institutions to make financial services more accessible.

For those looking for a more niche sub-sector, the CFTE AI in Finance course offers a look at the impact of artificial intelligence on the finance industry. Senior figures and thought leaders in AI contribute modules to the course and you will gain an understanding of the various AI technologies and the challenges of merging them with existing services.
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