2024 got off to a challenging start for the fintech market globally, driven by ongoing concerns related to geopolitical uncertainty and high interest rates. Total global investment declined from $62.3 billion to $51.9 billion between H2’23 and H1’24—the lowest six months of fintech investment since H1’20. All regions experienced a noticeable drop in fintech investment, with the EMEA region experiencing the sharpest drop—from $19.4 billion to $11.4 billion between H2’24 and H1’24.
While fintech investment remained suppressed, deal volume offered a hint of optimism for the fintech market; both the Americas—including the US—and the ASPAC region saw deal volumes increase between H2’23 and H1’24.
At a sector level, payments continued to draw the largest share of fintech funding globally, attracting $21.4 billion in H1’24. Regtech, however, was the only major fintech subsector to see investment increase in the first half of 2024—with the $5.3 billion in investment already surpassing 2023’s total. At a technology level, AI continued to be a very hot area of interest for investors, particularly in the US.
Looking back on the first half of 2024, the sentiment of fintech investors can be characterized as restrained. Consider some of the key trends we’ve seen across the fintech sector over the past six months:
- Mature, stable markets attracting the largest fintech deals.
- Investors continuing to shy away from the largest deals, with very few exceptions.
- AI drawing significant interest, both as a means to improve operating efficiencies and as a means to reduce costs.
- Regtech interest continuing to increase, particularly in the EMEA region.
Whether you’re the CEO of a large financial institution or the founder of an emerging fintech, it’s critical to consider how your company can become more efficient and profitable given the cost of capital will likely remain high for some time. As you read this edition of Pulse of Fintech, ask yourself: How can we position our organization to be more competitive and sustainable both now and in the future?
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