Funding for fintech companies was up more than 4x to $2.7bn for the full year 2015 compared to $619m the previous year, according to a KPMG report.
A rise in the number of deals over $100m accounts for the jump in investment, which was mainly from venture capital firms.
“Interest in the market continues to be on robo-advisors, blockchain-enabled capability around asset management and consumer payments,” said James Mckeogh, Partner, KPMG China.
“Meanwhile, financial institutions are also looking at additional technologies and partnerships, in order to increase affinity with their consumers and customers.”
Peer-to-peer lending platforms and underwriter and lending platforms that utilise machine-learning technologies and algorithms to assess creditworthiness are generating strong interest.
Mainland banks and insurance providers are also interested in adopting fintech, added Irene Chu, partner and head of the high growth technology and innovation group.
“Chinese banks are focusing their strategies around the small and mid-sized enterprise space, an area that has been underserviced by large banks in the past. There’s also increasing interest in fintech companies that offer alternative financing arrangements, giving consumers alternatives beyond traditional banks. This is especially true in remote areas where large percentages of the population are under-banked.”
China’s spike in fintech funding mirrored that of Asia as a whole, where investment jumped in 2015 to $4.5bn from $1.1bn in 2014, the report said. India was the second largest in the region, pulling in $1.5bn in fintech investment.
China accounted for one-fifth of total global investment into fintech startups, which reached $13.8bn last year.
Source: KPMG Report “The Pulse of Fintech, 2015 in Review”