Recent data form KPMG has shown that the total amount invested and number of deals in America fintech companies has dropped significantly whereas in Asia there is continual growth in fintech investments. The third quarter of 2016 was the second time this year where North America fintech companies attracted less venture capital funding than Asian firms. A big reason for the the American fintech hubs ranking very low in terms of “policy” is because they are subject to regulation at the state level. Investors are worried about the persistent confusion regarding the regulations and the uncertainty that is evolving with them. Some of the speculation is around the question of whether the Fintech firms should be regulated as financial companies or IT service platforms. With the new administration in office, there is a lot of speculation about the administration’s economic plans, which is likely to slow investment in the sector. I believe the lack of clarity with regard to Fintech regulation among both the State and Federal Government will have some negative effects on the growth of Fintech. With that being said, I think the importance of Fintech will continue to make it a growing market in the U.S.
I think this is a very interesting and important discussion to have, as it does seem that Fintech has been enjoying rather loose regulation to date, though one would hope that its security would be more reliable given the sensitive information Fintech deals with.