#Market Strategy — 31.05.2019

Global Fintech Equities in 2019

What are the key global fintech trends & opportunities to watch in 2019? Here’s a quick Q&A with Patrick Lemmens, Senior Portfolio Manager, Robeco Asset Management to bring you upto speed.


Q1: What are the key areas of global fintech that are driving the industry?

Payments is still the strongest part of growth in fintech and has the most listed opportunities there as well. Another very important part of fintech is the part where banks, insurance companies and asset managers need to invest a lot in financial technology to basically get rid of the old stuff they've got.

So, those will be the two most powerful parts of listed fintech today.

Q2: How would you describe the fintech landscape in Asia?

Well, Asia clearly is the most advanced. I mean, it's not just about numbers of people because with China and India, we've got more than 1 billion people.

But, it's also the part of the world where technology has made tremendous jumps. This is happening because legacy technology is hardly present. That's a huge advantage.

We believe that in the long term China and India will be the biggest in terms of listed investments in fintech.

Q3: What are the most important innovations in global fintech happening today?

Artificial intelligence is driving a lot of innovation, a lot of change. Another thing you would need to mention is distributed ledger technology. Sometimes, also referred to as blockchain.

Big data is clearly something which is important and that's where China and India also have a big advantage because you're talking about 1 billion plus people.

You have innovations or developments in stuff like robo advice and peer-to-peer lending. Those are very difficult to make profitable today because the acquisition cost is really a challenge.

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Q4: What is the outlook for investment opportunities in fintech for 2019?

Well, we believe, there is actually a lot of potential left. Simply because, what we have seen year-to-date is a recovery of a very poor fourth quarter.

The fundamentals are strong, growth is still continuing at high teens level. Whereas the evaluations are a little bit higher than they were at the beginning of the year. But, they're still clearly below the beginning of 2018.

So, overall, we are quite enthusiastic.

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Q5: What are the key fintech trends to keep an eye on over the next five years?

One, we find, very important, very interesting is invisible payments.

Increasingly, you do not see who's processing the payments, who is behind it. I mean, if you go to an Amazon store and you walk out and you basically get a charge to your account and there's no need to have a credit card or debit card.

So, invisible payments is a very powerful trend that will change the landscape for payment companies.

Regarding the other stuff, we have already mentioned quite a few. I mean, artificial intelligence, distribute ledger technology, robo advice, peer-to-peer lending.

Finally, I would like to mention technology within banking, technology within insurance.

Large tech companies are increasingly looking at having more financial services offerings. I don't think they are gonna be doing it all by themselves. They will want to cooperate with banks/insurance companies. But, if you want to do that cooperation in a good way. You have to be really good at IT as well.

Further reading:

What Are The Fintech Trends To Watch In 2019?

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