Fintech Funding Declines Amid Economic Uncertainty

Global fintech investment declined sharply in 2024, reaching its lowest level since 2017, according to KPMG’s Pulse of Fintech report. 
 
The sector saw $95.6 billion in total investment across 4,639 deals, as macroeconomic challenges, geopolitical tensions, and election uncertainties dampened investor confidence.
  
The second half of 2024 was particularly sluggish, with investments falling from $51.7 billion in H1’24 to $43.9 billion in H2’24. 
 
However, a slight rebound was observed in Q4’24, with global fintech investment rising from $18 billion in Q3’24 to $25.9 billion. Both M&A deal value and VC investments saw quarter-over-quarter growth, indicating early signs of recovery.

 
Regionally, the Americas led fintech investment with $63.8 billion across 2,267 deals, of which the U.S. accounted for $50.7 billion. 
 
The EMEA region attracted $20.3 billion across 1,465 deals, while APAC recorded $11.4 billion across 896 deals. 
Payments remained the dominant sector, securing $31 billion, followed by digital assets ($9.1 billion) and regtech ($7.4 billion).
 
Despite the downturn, KPMG’s global head of financial services, Karim Haji, expressed optimism for 2025, citing interest-rate cuts, easing market uncertainties, and an increase in deal activity. 
 
However, he cautioned that inflation and global trade conditions could impact investment momentum in the coming months.
 
Digital assets and blockchain-based financial solutions are expected to gain traction, particularly in stablecoins, digital tokenization, and market infrastructure. 
 
Additionally, AI-driven fintech solutions, especially in regtech and cybersecurity, are projected to attract significant investment in H1’25.
 
AI…. particularly generative AI and automation, is emerging as a game-changer in fintech. However, investors remain cautious, awaiting clearer regulatory frameworks and real-world applications before committing large-scale investments.
 
As the fintech industry navigates economic uncertainties, investors are expected to focus on AI-driven compliance, cybersecurity, and digital finance innovations, shaping the next wave of fintech evolution.