Pulse of Fintech

Biannual analysis of global fintech investments.

H2 2022 - Pulse of Fintech latest edition

2022 was a challenging year for fintech investment globally — with the Americas in particular seeing a $40 billion drop in investment compared to 2021’s high. The decline in deal value doesn’t tell the full story, however. Deal volume was incredibly robust this year: the second highest total next to 2021. Seed deals saw record investment, which bodes well for the long-term fintech pipeline. At a sector level, regtech investment soared to a new high, while geographically, the Asia-Pacific region also hit a new peak — if by a much narrower margin.

The diversity of jurisdictions attracting significant fintech deals was also very strong. In H2’22 alone, 24 different countries attracted $100 million+ fintech deals (VC, PE, M&A) — ranging from traditional hubs like the US, UK, Singapore and Hong Kong (SAR) to less mature fintech hubs like South Korea, Luxemburg, Italy, Malaysia and the UAE. This diversity reflects the myriad value propositions offered by fintech around the world, from enabling innovation at financial institutions to supporting small business growth and improving financial inclusion and access to financial products.

Looking across 2022 as a whole, there’s no doubt that the fintech market globally saw both highs and lows. Consider some of the key trends we’ve seen:

Surging investment in regtech as companies look to technology to help them manage their increasingly complex regulatory compliance obligations
Rapidly cooling investment in cryptocurrencies and crypto exchanges between H1’22 and H2’22, with more challenges expected on the horizon
Strengthening partnerships between fintechs and incumbent financial institutions, including banks, insurance companies and wealth management firms
Decreasing number of large deals in H2’22 compared to 2021 and H1’22 as investors waited for valuations to stabilize.

With the word recession being used more and more, the IPO window still closed and the valuations of late-stage companies still under pressure, there could be a bumpy road ahead as we enter 2023. But there continues to be money in the fintech market globally. Fintechs that have strong value propositions and that can really show the viability and sustained profitability of their business models will likely continue to attract attention — particularly in sectors like regtech and cybersecurity.

Longer term, we believe the outlook for fintech investment remains quite positive given the ongoing transformation of financial services around the world and the strengthening focus on embedding financial services into other sectors.

Whether you’re the CEO of a large financial institution or the founder of an emerging fintech, focusing on getting the most from every dollar you invest can help you forge a strong path forward. As you read this edition of Pulse of Fintech, ask yourself: What do we need to do to become more resilient as an organization and how can we use our strengths to create unique value for our customers, clients and investors?