Accenture in association with Partnership Fund for New York City has recently published Fintech’s Golden Age report which highlights how there is a shift from competition to collaboration in financial sector and how the banking ecosystem is changing.
As per the report, there is more than 75% increase in the investment in financial technology ventures to USD 22.3 billion in 2015 as compared to USD 12.6 billion in 2014 globally. The number of deals also rose by nearly 28% to 896 in 2015 as compared to 702 in 2014. There has been a move towards collaboration as tech-savvy start-ups partner with, or are acquired by, established financial institutions.
In 2015, Fintech investments have tripled in New York as compared to investments in 2014 and the investments accounted for around 10% of all global Fintech investment. 101 deals were signed in New York and the investment totaled USD 2.3 billion. In the first quarter of 2016, for the first time ever New York received more Fintech financing than Silicon Valley. The report shows that New York received USD 690 million in the first quarter as compared to USD 511 million received by Silicon Valley.
Maria Gotsch, President and CEO, Partnership Fund for New York City said that “For Fintech entrepreneurs, New York provides advantages no other city can match. It offers close access to potential customers and deep pool of talent. With each passing year the New York City’s Fintech industry becomes more established and a larger force in the city’s entrepreneurial and financial services ecosystem.”
The report which analyses CB Insights data highlights that in North America more Fintech investment is in ventures that partner and collaborate rather than ventures that compete against financial institutions. In North America, 60% of the ventures are collaborative and 40% are competitive in 2015 which is a reverse of the ratio that was in 2010.
In 2015, banks invested around USD 5 billion in venture deals as compared to USD 50 billion investment in new technology. Many financial institutions are adopting new technologies that could save time and money and rebuild profit margins for them in near future. Robert Gach, Managing Director, Accenture Capital Markets Strategy stated that “With friction easing and cooperation growing between traditional financial institutions, Fintech start-ups, regulators and consumers, financial services firms need to take the next step.”
Full report can be downloaded here.