Technological transformation is changing many aspects of how we live and work, and this is particularly true when it comes to financial services. Discover what this means for investors.

What is Fintech?

Fintech describes the ecosystem of companies that apply technological innovation such as data and analytics, software, artificial intelligence or mobile technology to disrupt and/or improve the financial services industry. These companies can be existing financial or technology firms developing in this area, or companies specifically created to focus on financial technologies.

Technological transformation is changing many aspects of how we live and work, and this is particularly true when it comes to financial services. Innovations in financial technology like mobile banking, digital payments and blockchain are taking us into a new era of disruption.

What does this mean for investors?

The number of financial transactions we make each day has risen steadily in recent years, and digital payments are becoming more embedded in other routines. As this pace of innovation gets quicker, customers increasingly expect the ability to make secure financial transactions anywhere, anytime, on any platform.

Number of Worldwide Non-Cash Transactions (Billion), 2016-2021

Sources: Capgemini Financial Services Analysis, 2018; ECB Statistical Data Warehouse, 2016 figures released October 2017; BIS Red Book, 2016 figures released December 2017; Countries’ central bank annual reports, 2017


Financial companies are acutely aware of how quickly their consumers’ behaviour is changing, and many established players are expanding their digital offering to give customers all the services they need.

Around the world, companies are capturing the potential of this financial technology to disrupt their markets, serve their customers more efficiently, and ultimately gain market shares compared to their peers.

Consumer-Bank interactions by distribution channel, 2015-2020 (Million)

Source:; Five Future Trends Shaping the Retail Banking Sector, Knight Frank, January 2018



The average fintech adoption globally in 2017, compared with 16% in 2015 [1]. The adoption rate is still unequal, implying a necessary catch-up in many countries.


Estimated spend by financial services companies on IT infrastructure in 2021 [2].


Global fintech investment (through private equity, venture capital and M&As) more than doubled to $112bn in 2018 [3]. We believe that such investments will continue to underpin innovation and future growth in fintech, creating further opportunities in public markets.


Investing in fintech

We have identified three themes as being multi-year trends for the fintech industry under which we believe companies are poised to experience rapid growth:

  • Cashless society: People around the world are increasingly making digital payments, taking us towards a cashless society
  • Innovative leaders: Many established companies are disrupting or improving the financial services industry by using technology to serve their large, existing client base
  • Technology enablers: These companies provide the crucial technology to support and develop fintech companies’ digital presence via various channels and devices

We also see the business-to-business fintech space as an area with high-growth potential; such firms look to fill the gap left by banks’ withdrawal from small-and medium-sized enterprise lending, while also providing solutions in payment processing and workflow streamlining.

Why now for fintech?

Financial institutions are also beginning to speak ‘fintech’ and are becoming more aware of how innovation can transform their businesses. Meanwhile, established technology companies are seeing the value of partnering with fintechs as they tackle the complexity of entering the financial services industry – for example, local regulation, capital requirements and reputational risk.


1 EY FinTech Adoption Index 2017
2 IDC Report 2018 
3 KPMG, The Pulse of Fintech 2018, 13 February 2019 
* Source: US Department of Commerce, latest data available as of March 2018
^ Source: Citi Research, Citi GPS “Technology at work v3.0”, August 2017
% Source: IFR World Robotics Report 2017, latest available data as of March 2018
& Source: Financier Worldwide, “Investing in the clean technology revolution”, January 2016\
# Source: UN, correct as at March 2018