The fintech investment story has been one of a boom in Asia this year, figures show, and there are more developments in the pipeline to keep the numbers rising, according to a new report.

The amount of investment into financial technology, or “fintech”, is expected to surge by a factor of four this year, with deals reaching $3.46 billion in the first nine months of 2015 already, according to a report by Accenture.

The nine-month figure compares with $879 million invested in 117 projects for the whole of the previous year, it said.

The upsurge of interest in fintech, which covers a range of areas such as mobile apps, cognitive computing and developments such as “robo-advisors”, has been noticeable in Asia. For example, Credit Suisse chose to launch its mobile private banking platform in Singapore rather than its native Switzerland. Banks such as Citigroup have held innovation competitions in the region. As reported in September, Citigroup named partners for a programme to encourage financial technology innovation in the Asian region: IBM and PricewaterhouseCoopers. DBS, meanwhile, has made no secret of how digital technology is a core part of its whole banking business strategy. Asia e-commerce giant Alibaba has its own wealth management platform. In a separate report issued yesterday, meanwhile, Cerulli, a Boston-based firm, said that in the US digital advice market alone, assets under management are projected to be $489 billion by 2020 from just $18.7 billion now - giving some idea of how fintech-driven business models are seen as a significant growth area.

Accenture’s report said innovative fintech ventures in payments and lending took the largest share of those investments from January to September this year at 40 per cent and 24 per cent, respectively. Accenture executives said the participation of large, non-traditional financial services companies as investors in innovative payment ventures have boosted the overall value of fintech projects in the region the past several months.

The involvement from the Chinese mainland in fintech has had a significant boosting effect, Accenture said, referring to investments from Alibaba Group Holding and its Ant Financial Services Group subsidiary into Paytm, a mobile payment and commerce platform in India, as well as fundraising efforts by Ping An Insurance Group venture Lufax, which has been developing multiple alternative financing and investment platforms, including peer-to-peer and business-to-customer platforms.

“Major non-traditional financial services companies have been investing in fintech payments in China for the past year,” Beat Monnerat, senior managing director at Accenture and the company’s financial services lead in Asia-Pacific, said. “The increasing deal size should serve as a wake-up call to financial services companies in China and across Asia-Pacific that if they do not offer truly useful, customer-friendly digital solutions, competitors will step into the breach not just on the retail front but also in commercial transactions,” he said. 

The blockchain 
Financial services firms are also now turning to fintech for help in streamlining operations, complying with changing regulations and new currencies, the report said, forecasting that the “blockchain”, which is a distributed ledger technology supporting the exchange of crypto currency and cryptographically secured financial assets, will increasingly be a focus for start-ups, banks and investors. 

Another opportunity worth watching, the report said, is the impact of cloud computing. As cloud adoption gains momentum, banks are beginning to identify which data can be hosted in the public cloud and which data should be maintained in a private cloud. 

Accenture also expects investment in cyber security to increase significantly in the coming year, especially in light of recent large-scale data breaches reported in the media. 

This report is based on Accenture’s analysis of fintech investment data from CB Insights, a global venture finance data and analytics firm. The analysis includes global financing activity from venture capital and private equity firms, corporations and corporate venture capital divisions, hedge funds, accelerators and government-backed funds from 2010 through 2014. Fintech companies are defined as those that offer technologies for retail, commercial and investment banks, insurers, asset managers and payment services providers as well as alternative providers of financial services (e.g., P2P platforms and digital currency exchanges).