China cemented its status as a world leader in financial technology services this year, claiming five of the top 10 spots in the annual list of the globe’s leading fintech companies, compiled by UK-based advisory firm KPMG and Australian investment company H2 Ventures.
China’s Ant Financial, which owns and operates the country’s largest online payment platform Alipay, topped the 100 Leading Fintech Innovators 2016 released Monday and was joined by four other Chinese companies. Student microloan site Qudian came in second this year, internet based lending and wealth management platform Lufax took fourth, online insurance business ZhongAn took fifth, and risk management company JD Finance came tenth.
Last year two Chinese companies made the top ten – ZhongAn claimed top spot, while Qufenqi, an electronics retailer that lets buyers pay in monthly instalments, took fourth. This year, eight Chinese companies made the top 100, compared to seven last year.
The emergence of China, increased competitiveness from emerging markets and the impact of Brexit to funding in the sector is now threatening the UK’s status as the world’s leading fintech center, according to analysts. The UK went from 18 companies in the top 100 last year to 13 this year, with just one – banking app Atom – in the top ten compared to two in 2015.
Most of the top 50 fintech companies are dubbed as “disrupters” that seek to challenge established financial services companies and traditional business models.
Fintech companies are ranked based on the following groups of factors:
- Total capital raised
2. Rate of capital raising
3. Geographic and sector diversity
4. Consumer and marketplace traction
In the first quarter of this year, fintech companies in China attracted $2.4 billion from venture capital firms in nine deals, or 49 percent of the $4.98 billion in investment in the sector recorded globally. In April, Ant Financial raised a record-breaking $4.5 billion in funding.
1. PR newswire: “KPMG And H2 Ventures Announce The World’s 100 Leading Fintech Innovators For 2016”, 2016, < http://www.prnewswire.com/news-releases/kpmg-and-h2-ventures-announce-the-worlds-100-leading-fintech-innovators-for-2016-300349569.html >;
2. Financial Times: “Cina challenges London’s fintech lead”, Emma Dunkley, 2016, < https://www.ft.com/content/a3c 5d652 -9914-11e6-8f9b-70e3cabccfae >;
3. Ecns.cn: “China dominates list of world’s top 10 Fintech companies in 2016”, 2016, <http://www.ecns.cn/business/ 2016/10-25/231428.shtml>.