Accenture report shows Fintech investment tripled in 2014
Investment in financial technology companies has trebled last year.
The digital revolution in financial services is picking up steam, according to a report from Accenture.
Global investment in financial technology businesses tripled to more than $12.2 billion in 2014, up from a little over $4 billion in 2013.
Accenture’s report, The Future of Fintech and Banking: Digitally disrupted or reimagined?, pointed out that worldwide investment in fintech companies grew by a staggering 201 per cent last year, much higher than the 63 per cent growth seen in overall venture capital investments.
Fintech an attractive industry for investors
The report illustrates how the fintech sector is rapidly amassing huge sums of funding and will continue to be the hot new industry for investors.
Expectations for new digital start-ups is building and it remains to be seen how these new and innovative businesses will impact the industry as a whole.
While recent reports highlight how individual services provided by traditional banks are coming under attack from start-ups, Accenture’s research shows some established financial services players are starting to engage with emerging innovations.
“The fintech sector is often characterised as a battle between the old and the new,” the report explained.
“But it is worth noting that the flood of new money going into the space is distributed across both parts – in fact, with a slight bias towards investments in more established companies.”
Can established institutions deal with fintech innovations?
Accenture’s survey of senior industry executives involved in the FinTech Innovation Lab revealed that almost three-quarters of them feel their bank has only a fragmented or opportunistic strategy to dealing with digital innovation.
The concern is that the speed of innovation and deployment of new technologies by fintech startups will overwhelm established financial institutions- they won’t be able to keep up and will waste resources in trying.
Three-fifths of respondents to the survey feel that banks will survive and thrive in the digital future, either because “new and existing banks would find ways to grow and enrich the market overall” or perhaps because “established banks would simply acquire the new players”.
Whichever way it goes, it’s sure to be an exciting ride for those in the industry.
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