FINTECH is a portmanteau of the terms ‘Finance’ and ‘Technology’, and is used to describe businesses that create software and integrate modern technologies (AI, blockchain, data science etc.) into traditional financial sector with an aim to enhance, automate, secure and improve financial services and processes. Initially, FinTech referred to technology that was applied to the back-end systems of financial institutions, but today it has grown to encompass a broad variety of technological innovations in consumer and commercial financial activities such as money transfers, depositing a check with smartphones, online money lending, crowd funding/ raising equity, or managing investments, generally without the assistance of a person. Some well-known examples of FinTech companies include PayPal, Venmo, Ant Group and even cryptocurrencies such as Bitcoin.


Ant Group (erstwhile Ant Financial) backed by Jack Ma’s Alibaba Group, is the highest valued FinTech company in the world. Founded in October, 2014, Ant Group has disrupted China’s financial system by offering various fintech services comprises mobile payment, aggregator for financial/ insurance services, mutual fund investments, micro finance/loans, online credit scores among other services. The flagship product of the company being Alipay caters to China’s USD17trillion online payment market. The company is termed to be world’s biggest super unicorn, and was seeking USD34.5 billion in IPO (the company valued at around USD313 billion), world’s biggest IPO ever. Supposed to be offered in November, the IPO however was suspended due to certain regulatory constraints from Shanghai Stock Exchange.


FinTech companies can broadly be classified into following categories:

  • Payments – Banks have traditionally charged higher fees for simple payments such as peer to peer transfers, international money transfers etc. FinTech companies in particular have disrupted this segment by enabling customers to send money more quickly and cost effectively. According to Statista, the global mobile payment market was USD1 trillion in FY2019. Popular mobile payments applications include Venmo, Apple Pay, AliPay (Ant Financial/ Ant Group)
  • Consumer Finance – Consumer finance segment is witnessing significant disruption with FinTech companies introducing a variety of applications and solutions comprising money lending, financial advisory, stock-trading budgeting etc. FinTech companies have automated and simplified the process such as assessing credit worthiness of consumers, underwriting loans etc. Some popular names include Credit Karma, Robinhood, Acorns, Intuit
  • Equity Financing – FinTech companies have changed the dynamics of fund-raising by creating virtual platforms, making it easy for businesses to raise much required capital. Many of these FinTech companies work to connect accredited investors with vetted start-ups, while others use a crowdfunding model and let anyone invest in new businesses. Some of the companies in this segment include Kickstarter, Patreon, GoFundMe etc.
  • Insurance – Insurtech (FinTech companies for Insurance sector) today include a plethora of companies offering solutions from car insurance to home insurance, and data protection. Insurtech start-ups are increasingly attracting funding. For instance, Oscar Health backed by Khosla Ventures, one of the popular start-ups in the field, secured USD165 million in funding in March 2019 at a USD3.2 billion valuation, as reported by CNBC.
  • RegTech – Given the ever-changing regulatory framework for financial services, adhering to these regulations is major challenges for businesses. Using big data and machine-learning, RegTech tools monitor transactions and identify outliers that may indicate fraudulent activity.
  • Cryptocurrency – Cryptocurrency and digital cash have probably been the most talked about FinTech advancements. Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin and others.

FinTech today has evolved from being an enabler of better services, to driving the growth engine. Despite concerns over global trade, cross-border transactions were recorded at USD54.2 billion in cross-border M&A deal value across 138 deals. According to a 2019 report of Business Research Group, the annual funding in FinTech was expected to reach around USD300 billion by 2022, growing at an annual rate of over 20%. Many niche areas of fintech continued to grow and evolve throughout 2019; wherein the investments in PropTech grew from USD1.9 billion in 2018 to USD2.6 billion in 2019, while fintech-focused cybersecurity investment more than doubled from USD316.9 million in 2018 to USD646.2 million in 2019. However, due to the COVID-19 pandemic, like most of the other sectors, the FinTech investments were negatively impacted.

As the broader economy shifts from respond to recover from the pandemic, latest report from Fleishman Hillard a global digital PR agency, indicates that FinTech companies would be instrumental in global economic recovery, as the sector would remain profitable and would provide new opportunities for SMEs. Business models are being re-evaluated to incorporate new strategies and remote capabilities in a post-COVID-19 world. According to Financier Worldwide, a leading information source covering corporate finance and board-level business issues, the FinTech wave emerged primarily from the chaos caused by the 2008 global financial crisis. The uncertainty of the times necessitated innovations in financial sector, consequently, FinTech attracted significant investment and began to revolutionise financial services. The COVID-19 crisis presents yet another opportunity to advance this legacy.

According to experts, a few areas within the FinTech industry that are likely to witness increased activity post-COVID include:

  • Financial Inclusion – According to World Bank data, around 1.7 billion people globally are unbanked. FinTech would play a pivotal role in integrating this population into the global banking system.
  • Digital Finance/ Contact less payment – The pandemic has accelerated the use of digital payments and e-wallets owing to the concern of transmission of virus with physical cash transactions. According to a recent survey conducted by Mastercard, 82% of respondents worldwide viewed contactless payments as the cleaner way to pay, while 74% responded that they will continue to use contactless payment post-pandemic.
  • Cybersecurity – As more and more financial services continue to be offered online globally, the risk exposure and probability of frauds would also increase. Consequently, cyber security is expected to take greater prominence.
  • Digital Transformation – Financial Institution would require to undergo faster and smarter digital transformation, with stronger integration from the backend instead of divided complex legacy layers. For instance, as open banking wins more traction, traditional banks will be forced to improve their API strategy and execution.

PKF UAE has a team of highly experienced professionals with many years of expertise, offering a wide range of advisory services across sectors. PKF can assist upcoming and aspiring FinTech startups with fundraising process by assisting in preparing investor pitch decks, Information Memorandum, Business Plans, Financial Projections, deriving valuations etc. We would be happy to discuss any of your requirements. Please feel free to get in touch with us on or at


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