This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.After significant growth in Q1 2016, global VC-backed fintech funding in Q2 2016 dropped back to levels closer to those seen in Q4 2015, according to data from KPMG and CB Insights.Funding reached $2.5 billion in Q2 2016, down 49% from $4.9 billion Q1 2016, and down 52% from $5.2 billion in Q2 2015.Deal numbers in Q2 also declined to 195 from 221 in Q1, and 218 in Q2 last year. The data only includesVC-backed funding rounds, and therefore doesn't count other sources of fintech fundingAnt Financial's $4.5 billion round in April is excluded, for example.Here are the key events in fintech funding from Q2 2016:A lack of super rounds drove the overall decline.In Q1, Chinese fintechLu.com raised $1.2 billion, and JD Finance, a subsidiary of e-commerce giant JD.com, raised $1.0 billion. Without these deals, fintech funding in Q1 would have been $2.7 billion. This suggests that fintech funding is actually plateauing.In the US, insurtech and alt lending continue to win. US insurtech saw a boost in Q1 when health insurer Oscar attracted $400 million in funding, and in Q2 another health insurer Clover continued the trend with a smaller but still significant $160 million round. Alt lender Affirm raised $100 million.German fintechs raised more than UK fintechs for the first time. VC-backed fintech deals in Germany reached $186 million in Q2, 45% more than the $102 million pulled in by deals in the UK. The three largest European VC-backed funding rounds were raised by German fintechsalt lender Finanzcheck raised $46 million, digital-only bank N26 raised $40 million, and payments firm Aevi raised $34 million. UK fintech funding could have been affected by Brexit uncertainty, while Germany is increasingly establishing its credentials as a fintech hub with government support.Weve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the newfintechrevolution.The battle already underway will create surprising winners and stunned losers among some of the most powerful names in the financial world: The most contentious conflicts (and partnerships) will be between startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations, and total disruption of established technology & processes:Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees'Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing much faster than traditional lendersonly time will tell if the banks strategy of creating their own small loan networks will be successful'Traditional Asset Managers vs. Robo-Advisors: Robo-advisors like Betterment offer lower fees, lower minimums and solid returns to investors, but the much larger traditional asset managers are creating their own robo-products while providing the kind of handholding that high net worth clients are willing to pay handsomely for.As you can see, this very fluid environment is creating winners and losers before your eyesand its also creating the potential for new cost savings or growth opportunities for both you and your company.After months of researching and reporting this important trend, Evan Bakker, research analyst forBI Intelligence, Business Insider's premium research service, has put together an essential reporton the fintech ecosystemthat explains the new landscape, identifies the ripest areas for disruption, and highlights the some of the most exciting new companies.These new players have the potential to become the next Visa, Paypal or Charles Schwab because they have the potential to transform important areas of the financial services industry like:Retail banking'Lending and Financing'Payments and Transfers'Wealth and Asset Management'Markets and Exchanges'Insurance'Blockchain Transactions'If you work in any of these sectors, its important for you to understand how the fintech revolution will change your business and possibly even your career. And if youre employed in any part of the digital economy, youll want to know how you can exploit these new technologies to make your employer more efficient, flexible and profitable.Among the big picture insights you'll get fromThe Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry:Why financial technology is so disruptive to financial servicesit will soon change the nature of almost every financial activity, from banking to payments to wealth management.The basic conflict will be between old firms and newstartups are re-imagining financial services processes from top to bottom, while incumbent financial services firms are trying to keep up with new products of their own.Both sides face serious obstaclestraditional banks and financial services firms are investing heavily in innovation, but leveraging their investments is difficult with so much invested in legacy systems and profit centers.Meanwhile, startups are struggling to navigate a rapidly-changing regulatory landscape and must scale up quickly with limited resources.The blockchain is a wild card that could completely overhaul financial services. Both major banks and startups around the world are exploring the technology behind the blockchain, which stores and records Bitcoin transactions. This technology could lower the cost of many financial activities to near-zero and could wipe away many traditional banking activities completely.This exclusive report also:Explains the main growth drivers of the exploding fintech ecosystem.Frames the challenges and opportunities faced by incumbents and startups.Breaks down global and regional fintech investments, including which regions are the most significant and which are poised for the highest growth.Reveals which two financial services are garnering the most investment, and are therefore likely to be transformed first and fastest by fintechExplains why blockchain technology is critically important to banks and startups, and assesses which players stand to gain the most from it.Explores the financial sectors facing disruption and breaks them down in terms of investments, vulnerabilities and growth opportunities.And much more.The Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry is how you get the full story on the fintech revolution.To get your copy of this invaluable guide to the fintech revolution, choose one of these options:Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIPPurchase the report and download it immediately from our research store. >> BUY THE REPORTThe choice is yours. But however you decide to acquire this report, youve given yourself a powerful advantage in your understanding of the fast-moving world of financial technology.Join the conversation about this story
Click here to read full news..
