China leads global fintech innovation efforts

List of the top 100 fintech companies in the 100 Fintech Report

ZhongAn Insurance, top company in the Fintech 100 reportChina's fintech firms have outshone their counterparts in other countries this year, according to ranking of fintech companies globally.

The 100 Leading Fintech Innovation Report, which evaluates and ranks the world's top 100 fintech companies, are the result of the collaboration between fintech investment firm H2 Ventures and KPMG Fintech. Two sets of rankings were released -- one covering the "Top 50 Established Innovators" globally and one comprising the "50 Emerging Stars", which the rankings describe as firms with the most disruptive, potentially game changing ideas.

Fintech firms were evaluated according to five sets of criteria: total capital raised, rate of capital raising, geographic & sector diversity, consumer & marketplace traction and X-factor. The latter assesses a fintech firm's degree of product, service and business model innovation, which the report states is a subjective measure applied only to companies appearing on its "50 Emerging Stars" list.

Highlights

According to the rankings, Chinese fintechs stood out this year, with Shanghai-based ZhongAn taking top spot in the 50 Established Innovators list, and Qufengi fourth. In contrast, WeCash was the only representative from China to appear on last year's list. This year, seven Chinese companies featured in the Fintech 100, reflecting increased venture capital levels and interest in China's fintech sector.

Globally, fintech financing jumped six-fold over the past three years with over US$20 billion estimated to be reached in 2015, a 66% increase on 2014 (US$12 billion).

The Fintech 100 comprises 40 companies from The Americas (40%), 20 companies from the EMEA (20%), 18 companies from the UK (18%) and 22 companies from the Asia-Pacific region (22%), including 10 from Australia and New Zealand.

Australia's SocietyOne and Prospa were included in the top 50 Established fintechs list, while seven Australian companies made the Emerging Stars list, signaling a burgeoning fintech industry in the country.


Other highlights from the Fintech 100 report include: a funding boom, where the FinTech 100 companies collectively raised in excess of US$10 billion; the payments sector is seeing the greatest level of disruption, with growth in payments, currencies and transactions representing 25% of the Fintech 100, a significant rise over last year.

Insurance firms are also easing into the fintech space, with seven insurance companies appearing in the list, compared to none last year.

This year also saw 25 service providers to financial institutions on the list, compared to just seven last year, signaling a shift from fintech disruptors to enablers.

"In an industry that will soon be irrevocably changed by the disruptive effect of innovation, the companies doing fintech best are those most likely to succeed," said Craig Davis, Head of Financial Services, Management Consulting ASEAN at KPMG commented. "Already, some of the world's major financial centers are equally becoming known as centers for fintech innovation: London and New York, and in Asia, Singapore."

"The speed and energy at which innovation in Fintech is having an impact on the financial services industry worldwide is gaining momentum," said Lyon Poh, Head of Digital + Innovation at KPMG in Singapore. "The broad geographic diversity of Fintech companies featured in this year's report underscores just how global Fintech has become."

Innovation through corporate-startup partnership

To stay relevant, corporate companies are pushing the boundaries wherever possible. According to the 2014 U.S. Corporate Venture Capital in View report, corporate venture capital investment in startups in the United States alone topped US$12.31 billion.

According to the Fintech 100 report, startups and corporates are looking for new ways to reap the fruits of cooperation. Corporates can benefit from the speed, nimbleness and innovative zeal of startups while startups can also benefit from the well-established distribution channels of corporate companies, large client base and operational expertise in scaling businesses.


Poh also noted that corporate innovation had not yet taken off in Asia, "Many corporates find it difficult to embrace value propositions that startups can bring and even when they do there are often internal corporate obstacles to integrating them.

They often struggle with how best to transform their internal organizational structure and processes to tap into the tremendous opportunities from digital innovation. Many corporates also fail to see the value in partnering with innovative startups to discover new business models and revenue streams. There is a need for a structured industry programme to improve sustainability in the startup ecosystem in the region."

The Top 10 companies in the Fintech 100 for 2015 are:
1.    ZhongAn (China)
2.    Oscar (USA)
3.    Wealthfront (USA)
4.    Qufenqi (China)
5.    Funding Circle (UK)
6.    Kreditech (Germany)
7.    Avant (USA)
8.    Atom Bank (UK)
9.    Klarna (Sweden)
10.   OurCrowd (Israel)
Refer to the table below for the Top 100 list.

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