There is no doubt that global financial technology (fintech) firms are on the rise and subsequently investment in this area is rapidly increasing. Venture Capitalists and Private Equity firms are beginning to inject unprecedented amounts of money into fintech start-ups and the long standing and traditional financial services sector is certainly facing a period of unsettlement.

WHAT DOES THIS MEAN TO ASSET MANAGERS?

Is there opportunity to be found in this sector? It seems there is, as according to Citigroup, around $19 billion of incremental investment has flowed into the sector over the last year. Strategies such as crowdfunding have been attracting increasing interest over the past few years and even look set to outpace venture capital funding in 2016 based on recent emerging trends.

Some fintech firms are releasing products and introducing tools that not only cut costs but assess risks, allowing smaller investors and allocators the ability to perform their own due diligence without the burden of costly overheads. This type of innovation and the independence it offers to smaller firms and retail investors has proven attractive and in turn injected pace into the trend toward fintech allocations.