Very few people will be surprised to hear that China is becoming the global leader in the fintech sector. Although the crown was held by regions such as London and Silicon Valley in the past, China is becoming the net market leader where fintech is concerned–or that is what the report published by DBS and EY tells the world.
China Dominates Fintech Rankings As Of Right Now
The fintech movement is in full effect all over the world and continues to attract the attention of a lot of international investors. In fact, it appears that China is investing a lot of money in the fintech sector as of late, although there are different reasons as to why this is happening. The global appeal of new financial service providers is just one aspect.
No one is disputing the influence that China has over the global fintech sector as of late, though. Investors have been making strategic financial contributions to startups all over the world in the hopes of finding the new financial service provider unicorn. Whether or not they have succeeded so far, remains anybody’s guess.
DBS Chief Innovation Officer Neal Cross stated the following:
“The speed at which China’s fintech landscape has developed is truly remarkable. It’s gotten this far because China’s landscape has operated in a sandbox-like environment conducive for fintech to thrive — a strong domestic market, coupled with a constant push for innovation and experimentation driven by leading giants, unhindered by international influence.”
The reasons behind this growth, however, extend well beyond the traditional investment opportunity spectrum. In fact, the Chinese government wants to curb foreign investments exceeding US$5m, as a way to limit financial outflows. It is very well possible that a lot of the 2016 investments were made to bypass any limitations the government would later impose.
Additionally, the country has seen a significant update in digital adoption throughout 2016. The number of tech-savvy millennials living in the country continues to explode exponentially, and they all have bright ideas. Some of them even become entrepreneurs who propose some of the most exciting fintech pitches but require funding to turn them into a reality.
Consumer adoption will only drive fintech adoption in the country even higher. According to the report, close to 40% of all consumers use new payment solutions. Moreover, 35% use non-bank fintech firms to access insurance products, which is quite a significant number. Fintech is booming and China is driving more investments in both the domestic and international market. The country has become the undisputed leader, that much is certain.
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