Fintech Decoded: 2022

Fintech deal activity in 2022 witnessed high volatility, with subsectors such as Payments+ and Blockchain/Crypto receding, while Business Solutions and Financial Markets domains gained prominence.

The emergence of new Covid variants, soaring US inflation, withdrawal of stimulus measures by the Fed and successive interest rate hikes leading to a recessionary environment, regulatory uncertainty caused by GDPR, China’s ban on cryptocurrency, a worse-than-anticipated slowdown in China, geopolitical impacts of the Russia-Ukraine war, and soaring Eurozone inflation have caused the downturn in 2022.

The global economic and political landscape is becoming increasingly uncertain, which has made venture capital firms more cautious about investing. Fintech companies with strong value propositions and sustained profitability will continue to attract investment, particularly in sectors such as RegTech and Cybersecurity.

The Blockchain/Crypto segment plunged significantly owing to the Terra (Luna) crash and FTX bankruptcy in 2022. As investor interest in crypto solutions pulled back, the broader blockchain space started to gain more traction with companies using blockchain-based technologies.

The increasing complexity of the regulatory environment with several changes in different jurisdictions (e.g., Basel IV, the EU Market in Crypto-assets Regulation, the Digital Operations Resilience Act, the AI Act, the Digital Services Act, ESG standards) enables greater focus and investment in the RegTech segment.

In this edition of Fintech Decoded, we bring you insights into the sector’s performance following the macroeconomic headwinds, along with notable funding trends across the globe in the fintech space in 2022.