China's financial technology investment in venture capital (VC) deals saw an explosive rise in 2015, according to the data compiled in the latest report by KPMG.
China's VC-backed financial technology investment went from around 600 million U.S. dollars in 2014 to almost 2.7 billion U.S. dollars in 2015, accounting for 20 percent of the overall investment in this area worldwide, according to the report.
Financial technology, or "FinTech", is a line of businesses which are founded with the purpose to facilitate the financial system by applying technology to services, such as mobile transactions.
Fund-raising platforms which offer online payment and currency transaction services, such as the peer-to-peer (P2P) brokers, contributed the most in China's recent FinTech business boom, according to the report.
ZhongAn, an online insurance group backed by Alibaba CEO Jack Ma, was at the top, drawing 931 million U.S. dollars in Private Equity funding last year.
KPMG attributed the explosive development in China's FinTech industry to the growing partnership among banks, insurance providers and FinTech firms.
Traditional financial service providers are increasingly seeking partnerships with FinTech firms in order to provide their customers a more secure and easy financial services, said the report.
More Chinese banks are turning to small and medium sized firms, which were overlooked by larger banks before, the report said, driving more collaboration within China's FinTech.
By providing an alternative financing approach beyond traditional banks, the increasing interest among the people in remote China where traditional banks cannot reach provides massive potential for China's FinTech business.
The Chinese government also played a positive role in driving the FinTech industry, according to the report.
As China undergoes an upgrade to development, moving from investment and exports to innovation, the government has been exploring ways to inspire creativity and tap the new ideas offered by start-ups.
"The Chinese government is taking a particular interest in driving FinTech in a responsible manner," said the report, adding that the government is conscious of the need to stabilize the market while encouraging companies to innovate.
