Global Investment and Development Trends in the Fintech Secto

• Main Author: Iryna Lukianenko
• Format: Article
• Language: English
• Published: National University of Kyiv-Mohyla Academy 2021-08-01
• Series: Наукові записки НаУКМА: Економічні науки
• Subjects: fintech; investment activity; new technologies; financial sector; cluster analysis
• Online Access: http://spne.ukma.edu.ua/article/view/239045
• ISSN: 2519-4739; 2519-4747

The article’s objectives are to reveal the general tendency in the global investment climate within the fintech industry and introduce the grouping approach for countries based on distinctive characteristics of local fintech and economic environments. Moreover, the paper results can be used as recommendations for local regulators in terms of the fintech industry development, which is a vital force for enhancing the competitiveness level of the countries in the context of world economic uncertainty. Statistics method is used to perform the investment activities and investment structure overview with a close look at three regions: Americas, EMEA (Europe, the Middle East, and Africa), and the Asia Pacific. The results indicate the largest role of the America region, the smallest – of the Asia-Pacific region, and two main trends in the investment structure by the nature of deals, the first with a predominance of M&A deals and the second with a high venture investments part. Another applied approach is clustering analysis. It is used to group the countries by the set of characteristics, which reflect the general economic conditions and innovation capacity in the financial sector of different countries from the general population. The clustering results give a snapshot of six groups of countries. The group with the highest results is called FinTech Olympus and consists of countries such as the USA, UK, and Singapore. The worst results were shown by the Fintech Jungle group represented by Kenya, Lebanon, Egypt, Uganda, Pakistan, Ghana, Nigeria, Bangladesh, and Ukraine. The other countries are grouped in four more clusters with research names – FinTech periphery, Asian-European, FinTech middle class, and Major players. Local regulators, for example, the National Bank of Ukraine, can further consider the results of clustering for maintaining fintech development policy to benefit the economy in general. In such conditions, the main tasks for the Ukrainian government are the improvement of business climate and fintech ecosystem development with the further discovery of their impact on the country’s competitiveness in an unstable economic environment in the short and long term.