Pulse of Fintech H1 2026: Asia-Pacific

ASPAC region sees $4.6 billion in fintech investment in H1’26

During H1’26, fintech-investment in the ASPAC region was $4.6 billion across 350 deals, down from $7.1 billion across 426 deals in H2’25. Deal value was particularly low in Q1’26 ($1.2 billion) before picking up to $3.4 billion in Q2’26. Several factors contributed to this softness, including fintech investors continuing to reassess late-stage valuations, shifting regulations, and geopolitical exposures.

VC investment accounted for many of the largest deals in the ASPAC region during H1’26, including a $900 million raise by a India-based rewards-focused credit management platform, a $320 million raise by a Singapore-based payments company, a $280 million raise by a India-based loan platform company, and a $150 million raise by a Australia-based crypto exchange.

India attracts largest share of fintech investment in ASPAC

India bucked the downward investment trend seen in other ASPAC jurisdictions, attracting $2.0 billion across 101 deals in H1’26, up from $1.8 billion across 102 deals in H2’25. South Korea came a distant second, with $899 million in investment across 31 deals, followed by Singapore ($499 million across 53 deals), Australia ($456 million across 28 deals) and Japan ($204.5 million across 37 deals).

Maturity of fintech sector in China creating structural market differences

During H1’26, total fintech investment in China was soft, with just $149 million invested across 33 deals. But part of this softness can be attributed to the structure of China’s fintech sector, including the maturity of its payments, consumer finance, and digital lending spaces. Many fintech capabilities have also been internalized by banks, insurers and large platforms. As such, interactions with fintechs have increasingly occurred through ecosystem partnerships, joint R&D and other initiatives where funding primarily falls outside of conventional VC, PE and M&A. Actual demand for fintech innovation has not waned in China, evidenced by its strong growth in digital products.

Hong Kong SAR continues to position itself as global fintech leader

During H1’26, Hong Kong SAR continued to work to cement its position as a global fintech leader, particularly in the digital assets space. In February, the Hong Kong Monetary Authority (HKMA) released its Fintech Promotion Blueprint, outlining specific measures to further accelerate fintech adoption, including in five key areas: AI, distributed ledger technologies, high-performance computing, data, and cyber resilience. In April, the HKMA also issued its first two stablecoin issuer licenses.

Trends to watch for in H2’26

India continuing to attract solid fintech investment given the strength of its economy.
Increasing interest in AI related to regtech and workflow automation as corporates look to drive operational efficiencies and cost out.
Strengthening AI investment in areas related to AML, operations and software engineering, customer service agents, and employee support agents (e.g. wealth advisory, corporate treasury, claims).
Core technology platforms increasingly introducing agentic AI solutions for financial workstreams.
Hong Kong SAR continuing to create policies and market supports across AI, stablecoins, and tokenization to support the institutionalization of digital assets.
Consolidation within the payments, credit, and wealth management spaces in China, with more scaled fintechs becoming acquirers.

After years of heavy technology spending, CFOs are increasingly focused on what delivers measurable value. That’s putting pressure on fintechs delivering services to traditional financial services players, albeit demand for regtech and compliance solutions remains strong. As regulation becomes more complex, we see AI is poised to play an increasingly important role in helping organizations manage risk and improve efficiency.

Daniel Teper

Partner, M&A and Head of Fintech

KPMG Australia