KPMG’s latest Pulse of Fintech report has revealed a surge in investment, globally, in the regtech sector with companies increasingly looking for ways to manage complex regulatory compliance obligations.
While 2022 was challenging year for fintech investment globally – with the Americas in particular seeing a $40 billion drop in investment compared to 2021’s high – at a sector level, regtech investment soared to a new high.
Although deal volume remained high there was a decreasing number of large deals in H2’22 compared to 2021 and H1’22 as investors waited for valuations to stabilise.
In the Europe, Middle East and Africa (EMEA) region, fintech investment dropped significantly year-over-year, from $79 billion across 2,379 deals in 2021 to $44.9 billion across 1,977 deals 2022.
The first half of the year performed much more strongly than the second, the report said, accounting for $32.8 billion in investment, including six $1 billion+ deals.
This included the $3.9 billion buyout of Italy-based SIA, the $2.1 billion acquisition of Sweden-based Tink and the $1.8 billion acquisition of UK-based Interactive investor.
Among other trends uncovered by the analysis was a continued strengthening of partnerships between fintechs and more traditional financial institutions, including banks, insurance companies and wealth management firms.
“Notwithstanding the cost pressures faced by most companies at this time, we still expect investment in regtech to continue to flourish, as businesses including other fintech’s, seek solutions to address the ever-expanding regulatory environment they face,” Anna Scally, Partner Fintech Lead, KPMG in Ireland, said.
