Blockchain a ‘catalytic force’ in soaring fintech market

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Digital Journal | By James Walker | August 21, 2017

Blockchain technology is propelling the fintech space to new highs as more investors get on board. The rising increase in fintech and the applications of the blockchain is leading to "exponential" increases in pilot projects, according to a new report.

KPMG covered the global fintech trends as part of its quarterly "The Pulse of Fintech" analysis. In the report, the firm said blockchain is attracting "significant attention" from a variety of fintech investors. These include traditional VC groups as well as corporations.

Investing in the blockchain is now starting to pay off. Last year, the amount of capital invested in blockchain companies more than doubled, up from $153 million in 2015 to $367 million. 66 deals were closed. This year, the blockchain is still growing steadily and is expected to meet or exceed last year's records. To the second quarter of 2017, 31 deals worth $133 million had been closed.

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This suggests the first quarter of the year was slower than in 2016. According to KPMG, this can be attributed to a rush of uncertainty around the long-term possibilities of blockchain tech. Having demonstrated the blockchain's a technically viable fintech solution, participants now need to start creating value from their prototypes.

"In the rush to prove the technical capabilities of blockchain prototypes, companies have neglected the need to show how blockchain can create value," said Eamonn Maguire, Managing Director of KPMG U.S. and Global Head of Digital Ledger Services at KPMG International. "For long-term success, there needs to be an emphasis on demonstrating how a blockchain production system can enable transformative change, whether by lowering costs, lowering capital or improving the customer experience."

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