Fintech companies may see more investor interest this year: Report

Financial technology companies may see additional investor interest this year after the government's push to digital transactions post demonetisation drive, says a report.

"With the demonetisation effort that started in late 2016, there has been a big increase in the number of transactions managed by both payments companies and wallet providers. As this effort continues, we should see momentum growing for digital platforms and fintech solutions," Neha Punater, Head of Fintech, KPMG in India said.

"The trend could be one to watch out for the first half of 2017," the KPMG Global Fintech trends report noted.

Corporate interest in fintech is also expected to increase in India over the next year.

Already, several of the country's banks and insurance companies have created innovation funds to invest in fintechs or set aside funds for collaboration, the report said.

"As India continues to push its digital currency initiatives, there are opportunities for novel product development within the space, as a number of entrepreneurs look to utilise blockchain protocols or present better use cases for consumers looking to gain exposure to bitcoin," the report further said.

The venture capital (VC) investments in the country saw a significant decline in 2016, with USD 216 million in investment compared to USD 1.6 billion in 2015, highlighting the impact of lack of mega deals even as actual deal volume remained steady, the report noted.

Despite the decline, India appears to be key focus for VC investors with fintech companies among the main areas of interest, the report said.