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Laxman Pai, Opalesque Asia:

Total fintech investment in EMEA declined significantly, given the lack of mega M&A deals. During H1'20, the region saw $4.6 billion in fintech investment, said a study.

VC investment in fintech remained strong in H1'20, accounting for US$4 billion in investment, said the bi-annual report on global fintech investment trends from KPMG International.

During H1'20, challenger banks attracted five of the 10 largest deals in EMEA, including Germany-based N26 ($570 million), UK-based Revolut ($500 million), Sweden-based Klarna ($200 million), UK-based Starling Bank ($123 million), and France-based Qonto (US$116 million).

"The deals reflect the growing focus on challenger banks as they work to scale and become competitive, not only in Europe but globally. In H1'20, Revolut and N26 both joined Klarna in the US market," said the report.

While the innovation expected from open banking is taking longer to materialize than expected, Europe continued to move forward with its fintech agenda. During H1'20, the European Commission consulted on a new digital finance strategy and fintech action plan for Europe to guide its activities over the next 5 years.

The next 6 months could be rocky for fintech investment in Europe depending on the length of time it takes to recover from COVID-19. The challenger banking space will continue to be hot as digital banks continue to grow and enter new markets. Tokenized assets will one key area to w......................

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