2022年Q4金融科技报告（英）-24正式版.doc

Q4 2022Fintech sector updateQualitative insights into broader Fintech trends and public and private valuations across the transaction spectrum, and interviews with todays leaders transforming the sector.Important disclosures appear at the end of this reportGP Bullhound Corporate Finance Ltd and GP Bullhound Asset Management Limited are authorised and regulated by the Financial Conduct AuthorityGP Bullhound Inc is a member of FINRAGP Bullhound Luxembourg S.À R.L. is regulated by the CSSF in LuxembourgTHE VIEWQ4 Fintech perspectives from GP BullhoundTakeawaysBANKS INNOVATE Pay by Bank leverages open banking to facilitate payments betweentrusted parties without the need for a card. The payment method hasAUTOMATEDseveral benefits including improved security, automated customerCLEARING HOUSEonboarding for merchants and reduced processing costsPAYMENTS TORecently, banks have established partnerships, with and withoutREMAINfintechs, to roll-out a Pay by Bank solution to ensure their paymentsCOMPETITIVEoffering remains competitive 114 countries globally, representing over 95% of global GDP, areexploring Central Bank Digital CurrenciesTHE FUTURE OF Increased adoption of blockchain-enabled solutions and masstransition to a cashless ecosystem is catalysing the proliferation ofCENTRAL BANKS digital currenciesIS IT DIGITAL?With multiple pilot programmes being held by both the Bank ofEngland and the European Central Bank, implementation anddynamics are under questionAI AND ML Artificial intelligence and machine learning have becomeincreasingly popular in credit scoring processes within the fintechADOPTION INindustry in recent yearsCREDIT SCORINGBy using alternative data sources, improving efficiency and speed,PROCESSES IS ONand personalising credit decisions, fintech companies can makeTHE RISEmore accurate and efficient credit decisions and improve thecustomer experienceNote: Please see following slides for sources2TakeawaysA LEADING TECHNOLOGY ADVISORY AND INVESTMENT FIRM, PROVIDING TRANSACTION ADVICE AND CAPITALGP Bullhounds recent Fintech activityACQUIRED BYINVESTMENT BYACQUIRED BYINVESTMENT BYACQUIRED BYINVESTMENT BYACQUIRED BYInvestmentBankingINVESTMENT BYINVESTMENT BYINVESTMENT BYACQUIRED BYACQUIRED BYINVESTMENT BYACQUIRED BYInvestmentManagementINVESTMENT BYINVESTMENT BYINVESTMENT BYINVESTMENT BYINVESTMENT BYFund IFund IIIFund IIIFund IVFund IV3TakeawaysGP BULLHOUNDS SECTOR TAKEAWAYSPressure from nimble fintechs is encouraging banksSelect newsto innovate ACH payments via Pay by BankOpen banking is modernising the ACH network to enable seamless payments via Pay by Bank During the third quarter of 2022, the Automated Clearing House (ACH) payment network processed 7.6 billion transactions representing $19.2tn in value. P2P ACH payments grew 10% YoY to 2.4 billion in Q3 as ACH payments become increasingly secure Open banking has catalysed the adoption of ACH payments as it enables individuals to share financial data between trusted parties and facilitate payments directly from the users bank account with improved speeds and without the need for a card ACH payments are typically inexpensive as they remove card processing fees and take the pain out of recurring payments for consumers. Popular use cases include utilities payments, rent, pension payments from the government and insurance For merchants, the Pay by Bank value proposition includes automated consumer onboarding, via open banking, and streamlined payment reconciliation. Additionally, Pay by Bank leverages the banks payment authentication network to improve security and lowers customer data storage costs since cards are not required and the payment is made account-to-accountDEAL DATE: NOV-22RAISED:$15MFEB-22: LAUNCH OFPAYDEALBY DATE:BANK SOLUTIONJAN-21TTV: $3.4NEV/REV: N/ABanks are steadily establishing partnerships to stay competitive against fintechs In November 2022, Mastercard announced its partnership with JP Morgan to roll-out an account-based (Pay by Bank) payment solution. The solution is currently in its pilot phase with a small number of US-based billers and merchants but is expected to expand significantly in 2023 Roll-out of the solution highlights JP Morgans aim of remaining at the forefront of payments innovation and aligns with the banks wider strategy of accepting payments anytime, anywhere JP Morgan is not alone in seeing the value of open-banking enabled ACH payments. Bank of America delivered their Pay by Bank solution in conjunction with Banked, a UK-based fintech. The partnership demonstrates how banks are now working with Fintechs to remain competitive Bank of of America's Pay by Bank solution is currently only available in the United Kingdom, but is expected to roll out into new regions soonSources: NACHA, Mastercard, Bank of AmericaDEAL DATE: MAY-22RAISED: $40MNOV-22:PARTNERSHIP TOLAUNCH PAY BY BANK4TakeawaysGP BULLHOUNDS SECTOR TAKEAWAYSCBDCs: Are Central Bank Digital Currencies arrivingSelect newssooner than expected?Over half of the worlds central banks are considering digital currencies (CBDCs) CBDCs are digital tokens or electronic records that represent a nations currency in virtual form allowing for facilitation of digital transactions and simplification of monetary transfers, backed by central governments 114 countries, representing over 95% of global GDP, are now exploring CBDCs with 11 countries having already launched their own state-owned digital currency Speculation around the introduction of CBDCs has been accelerated post Covid-19 due to the global shift towards digital, contactless and ecommerce payments reducing the need and use for cash Implementation of CBDCs can be implemented in a centralised or decentralised fashion. A centralised approach much like the current fiat mechanics would have all transactions recorded in ledgers that are controlled by a central bank. Decentralising a CBDC would require the bank to set regulation around the settlement of CBDC transactions that are then recorded by financial institutionsSEP-22: LAUNCHED E-DEALHKDDATE:TRIALSJAN-21TTV: $3.4NEV/REV: N/ASEP-22: ANNOUNCESDEALDIGITALDATE: EUROJAN- 21LEGISLATIONTTV:$ 3PLANNING.4NEV/REV: N/AWhy would a CBDC be warranted? A CBDC would look no different to how we use money or cryptocurrencies today, delivered through the private sector allowing payments through card or mobile. With the surge in private sector companies accepting cryptocurrencies already, public sector digitalisation is following closely behind Clear benefits arise around the topic of data protection and security with adoption of CBDCs. Increased control over personal data and anonymity, but with a clearer and more robust structure for initiating the audit process for AML, terrorism financing, fraud and tax The hurdle that faces a widespread adoption of digital currencies by central banks is the current state of private sector finance and how the implementation of a centralised, digitalised currency would undermine traditional business models. Additionally, increased risk of bank runs and lower deposits in commercial banks, which make private sector products more expensive, and other consumer-incurred costs also give rise to concernsSources: Bank of England, EDPS, Bank for International Settlements (BIS), Atlantic CouncilJUN-22: PROJECTROSALIND LAUNCHEDEXPLORING PRIVATESECTOR LEDGERSJAN-22: RELEASEDCBDC SOLUTIONSWHITEPAPERSUPPORTING CENTRALBANKS5TakeawaysGP BULLHOUNDS SECTOR TAKEAWAYSAI and ML adoption in credit scoring processes is on the riseThe availability of data and sophistication of AI & ML have opened many opportunities for creditscoring processes Artificial intelligence and machine learning have become increasingly popular in credit scoring processes within the fintech industry in recent years Credit scoring is the process of evaluating the creditworthiness of an individual or business, which involves analysing various financial and non-financial factors to predict the likelihood of default on a loan Traditionally, credit scoring has relied on humans to manually review and assess credit applications. However, the rise of fintech and advances in AI and ML have the potential to revolutionise the underwriting process of potential borrowers and credit decision-making. Here are some of the key trends in the adoption of AI and ML in credit scoring processes in fintech: Greater accuracy: AI and ML algorithms can analyse vast amounts of data and make predictions with a high degree of accuracy. This can help lenders to more accurately assess the creditworthiness of potential borrowers and make better lending decisions Increased efficiency: The use of AI and ML in credit scoring processes can help to streamline the process, reducing the time and resources required to assess applications. This can make the lending process faster and more efficient for both lenders and borrowers Enhanced risk assessment: AI and ML algorithms can analyse data from a variety of sources, including social media and public records, to provide a more comprehensive view of a borrower's financial situation and creditworthiness. This can help lenders to better assess the risk of lending to a particular borrower Greater access to credit: By enabling lenders to more accurately assess the creditworthiness of potential borrowers, AI and ML can help to make credit more accessible to underserved or traditionally underrepresented groups, such as those with limited credit histories Regulatory considerations: The use of AI and ML in credit scoring processes has raised concerns about potential bias and discrimination. As a result, regulatory agencies are increasingly focusing on the use of these technologies in lending, with an emphasis on ensuring that they are used ethically and in a way that promotes fairness and equal access to credit The adoption of AI and ML in credit scoring processes in fintech is likely to continue to grow in the coming years, as lenders look to leverage these technologies to improve their operations and better serve their customersSelect newsDEAL DATE: AUG-22RAISED:$23MDEAL DATE: NOV-22RAISED: UNDISCLOSEDDEAL DATE: JUL-22RAISED:$122MDEAL DATE: DEC-22RAISED: $54MSource: Datrics.ai6Transaction trendsCEO commentaryM&A AND FUNDRAISING ACTIVITY BY QUARTERDealmaking activity continues to remain low, driven by the corrections in valuation and weak economic sentimentTransaction M&A deal value and volume$bn, number of deals250600200500150400300100200501000202102018201820182018201920192019201920202020202020202021202120212022202220222022Q1Q2Q3Q4Q1Q2(1)Q3Q4Q1Q2Q3(2)Q4Q1Q2Q3Q4Q1Q2Q3Q4(3)Value (LHS)Volume (RHS)Fundraising deal value and volume$bn, number of deals503,000402,500302,0001,500201,0001050000Q1 2018(4)Q22018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Total capital invested (LHS)Volume (RHS)M&A deal value by regionFundraising deal value by region100%80%60%40%20%0%Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022(3)AmericasEuropeAsiaOther100%80%60%40%20%0%Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022(4)AmericasEuropeAsiaOtherSources: Pitchbook (as of 31 December 2022); Note: (1) Spike in value in Q3 2019 due to four extraordinarily large transactions with an aggregate value of c.$185bn: Ant7Group/Alibaba ($66bn), Worldpay/FIS ($48bn), First Data/Fiserv ($46bn), and Total Systems Services/Global Payments ($24bn); (2) Spike in value in Q4 2020 due to anextraordinarily large transaction of $22bn (TD Ameritrade/Charles Schwab & Co); (3) Unusual deal value in Oceania due to Squares acquisition of Afterpay ($28.5bn); (4)Spike in Asia fundraises value in Q2 2018 was caused by an extraordinarily large investment in Ant Financial ($14bn)Transaction trendsNOTABLE FINTECH M&AAs European equity capital markets remain shut, several companies have opted for SPACs as a route to go public*Deal dateTargetBuyerTarget descriptionEV ($m)Implied EV/LTM Rev30-Dec-22Embedded Finance-as-a-Service platform600n.a.19-Dec-22Operator of a crypto currency lender1,022n.a.