• Global fintech funding continues to grow. After landing at $19 billion in total in 2015, global fintech funding had already reached $15 billion by mid-August 2016. The US, Europe, and Asia Pacific continue to attract the most investment, though on a country-by-country basis, the focus is starting to change. 
  • Growth in the fintech industry is being encouraged by accelerators and incubators set up by legacy players and technology partners. These programs give financial services firms access to the newest business ideas, as well as a first-mover advantage if they want invest in or acquire the latest startups. 
  • Governments are also increasingly supporting the development of fintech industries. Regulatory bodies are starting to form partnerships with their counterparts in other countries, designed to facilitate the transmission of information and advice to help fintechs scale across borders. Governments want fintechs to thrive because they can increase competition in the financial services industry, likely driving down prices for consumers, while driving up quality and choice. Fintechs can also be major contributors to the national economy.
  • The segments of fintech attracting media and investor attention are changing. Alt lenders and payments firms were the among the first to get off the ground, and while both segments continue to attract funding, they are now being joined by new segments including insurtechs, robo-advisors, blockchain, and digital-only banks. It's also worth noting that segments with a large percentage of B2B fintechs continue to grow — and these firms have the potential to have a larger impact on global financial services than their B2C counterparts.
  • It's not all good news for fintechs — they still face hurdles regarding customer acquisition. Customer acquisition is particularly a problem for digital-only banks and robo-advisors, both of which need to scale for their business models to succeed. As a result, they are increasingly willing to enter partnerships and alter their business models.
  • Profitability also remains elusive for many large fintechs, even those with large volumes of customers and significant revenue. Many are relying on investment capital, which will eventually dry up unless they can achieve a profit. This leaves fintechs with the option to sell or partner with incumbents, and both avenues are becoming more popular. 
  • Incumbents' strategies to counter the growing threat from fintechs are taking several different forms. Legacy players are forming direct partnerships with fintechs, making investments in them, hiring [...]