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Future of Fintech: Investment Trends, Dr Anino Emuwa

Founder and Managing Director of Avandis Consulting, Dr Anino Emuwa talks through why fintech is the darling of investors.

Rebound in Investments

Global investing in fintech rebounded this year recording $30.8bn in Q2, the largest funding quarter ever (CB insights). This follows a drop of more than 30% in 2020 – from $168 billion in 2019 to $105 billion in 2020 —according to KPMG Global Insights— as the economic uncertainty brought about by the pandemic dampened investor appetite. This supercharged investment activity in fintech innovation this year follows on from the acceleration in digital transformation and the accompanying increased demand for digital financial services during lockdown.  Whilst overall global retail volumes fell an estimated 5.7 % (Statista), as firms and consumers moved online, e-commerce’s share of retail increased to 19% from 16% last year totalling of $26.7 trillion, powering a surge in payments.

Open banking and innovation

Innovation in the sector has accelerated with open banking regulations facilitating access to banking and valuable financial data through APIs. Fintech companies are truly disrupting financial services delivering creative solutions across the spectrum of digital and mobile products with payments, mobile banking and personal financial services amongst the most buoyant sub sectors.  Going digital means users are also able to enjoy a superior UX experience which is becoming a point of differentiation of these new applications, and there is no going back.

Unicorns and mega rounds dominate

The fintech sector today boasts 198 unicorns globally and is valued at $1.91 trillion (as of July 7th -fintechlabs) adding 12 in the month of June alone.  In the latest news (Monday 18th July)  Robinhood prepares for its IPO which could value the fintech at up to $35 billion.

The fintech landscape is complex and difficult to neatly categorise as it rapidly changes in order to reflect new technologies. Nevertheless, CB insights identifies 8 main sectors: payments, neo banks, digital lending, wealth management, insurtech, capital markets, solutions for smaller and medium size businesses (SMB) and real estate. To that could be added regtech. Whilst the sector has seen significant investment growth across most of its verticals, payments, digital banks, wealth management and SMB – particularly in loans- are seeing some of the biggest growth.

Interestingly, much of the recent investment in fintech can be attributed to mega funding rounds. Top 10 in H1 2021 were: Robinhood, ($3.4 bn) in two rounds;  Klarna ($41bn); Mollie – Dutch payment start up- $800 million; Nu Bank( $750m) Brazilian digital bank; 4 paradigm- AI- Klarna ($ 600m ); WeFox ($650m); Wealth Simple ($610 m); Stripe ($600 million); ($450m)  (source thefinancialbrand)

Centres of Activity

London retains its pre-eminence in the fintech sector attracting over a third of European VC funding ( in the first half of this year which comes as a relief in the wake of Brexit. The UK is second only to San Francisco and ahead of New York this year. The city hosts more fintechs than any other globally, around 3,000 with 29 fintech unicorns, with SF ahead with 37.

Investment activity in Europe marks change from previous dominance by the US and China. Latin America and Asia are also seeing growing activity with the Middle East and Africa (MEA) not been left out with the top countries for investment being Israel in leading position, followed by the UAE. In Africa, Nigeria leads with South Africa, Kenya and Egypt as other major hubs on the continent. Given Africa’s mobile first population, unsurprisingly VC investment on the continent has been dominated by fintech (techcrunch). Contrary to advanced countries’ VC funding has been mainly to start ups with examples such as Nigeria’s  digital Kuda bank raising $10 million last year and payment infrastructure firms such as Paystack, Flutterwave and Okra.  Other notable deals include Stripes $200m acquisition of Paystack in 2020. The continents unicorns now include Nigeria’s Flutterwave and Interswitch as well as Egypt’s e-payment platform Fawry.

Future Growth: sectors and trends

Alongside expected high growth in payments and digital banking, interesting developments to watch for include emerging technologies which will enrich the infrastructural architecture and provide exciting new opportunities such as blockchain, DeFi and digital currencies. Cryptocurrencies are showing signs of becoming mainstream with investment banks like JP Morgan, Morgan Stanley offering digital assets linked to crypto currencies as the eye watering valuation of cryptocurrency companies can no longer be ignored.  Artificial intelligence and machine learning will be increasingly deployed to efficiently sift through large amounts of data being collected and big data and data analytics will allow fintech to differentiate themselves in the future. Internet of Things (IoT) and Cloud are also expected to be areas on growth.

With the proliferation of data and valuable digital financial information, cybersecurity is now a necessity and will become an increasingly important area to protect financial institutions and customers.

Other trends to watch out for are the incursion of Big Tech in this space which has long since been eyeing the payment space and now exploring products including crypto contactless checkout, mobile banking and international transfers to name a few. Facebook, Apple, Google and Amazon exploring fintech innovation in further afield markets such as India, Brazil and Singapore with products including crypto contactless checkout, mobile banking and international transfers to name a few.

As traditional banks wake up to the threat of disruption by fintech, we expect to see more collaborations with fintech leveraging synergies. – Fintech face high customer acquisition costs meanwhile banks have the established client base and they can benefit from the technological innovation and client experience from fintech providing customer with seamless digital experience.

An often overlooked opportunity which could spur a trend are sectors un(der) served by traditional banking services. Products and services targeted to financial inclusion and financial services for women could reap big rewards.

Fintech investments have accounted for over 20% of V investment this year, says the Economist and many feel that this is just the beginning.  With the fintech valued now at $ 1.1 trillion, and a slew of ipos this year,  a record of over 60 as of July 6th  compared to the previous high of around 25 in 2015  (Pitchbook)- fintechs are fast becoming become part of the establishment.


Dr Anino Emuwa is Founder and Managing Director of Avandis Consulting, a strategy and financial advisory firm in France.  A former corporate banker with Citibank, she is a also a non-executive director, sitting on several boards including the Board of Governors of Nottingham Trent University. Anino is a and Diversity and Inclusion advocate; she is a member of the Institute of Directors’ Expert Advisory Group on Diversity and Inclusion and a member of the global advisory Board of UK’s 20-first, a gender balance consultancy firm.



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