US banks are future-proofing by actively investing in fintech. From insurance to blockchain, we visualize which fintech categories are seeing the strongest momentum — and which are cooling down.
Banks’ strategic areas of focus have shifted over time, as new technologies emerge and consumer tastes evolve.
Over the last several years, US banks have backed an increasing number of deals to fintech startups, seeking high returns and strategic partnerships. Since 2018, the capital markets category — which includes companies that are augmenting or replacing securities issuance, trading, clearance, and operations — has held strong as the top fintech category for banks’ investments.
Other categories — like blockchain, which reached a fever pitch in 2015 — have cooled off in recent years. Below, our heatmap displays where the top US banks have concentrated their bets in fintech over the past decade.
We define US banks as regulated banks with headquarters in the United States. Our analysis only includes equity investments made to private fintech companies since 2010. Categories are not mutually exclusive, and companies are categorized according to their primary focus.
Please click to enlarge.
- US banks have made 90+ individual investments to capital markets companies since 2010, making it far and away the hottest fintech category for investment. The largest round in this group was equity management firm Carta’s $300M Series E round in May 2019, which included Goldman Sachs, among other investors.
- Following capital markets, the wealth & asset management category has received the next highest number of investments from US banks. This category comprises tools and platforms for personal financial management, digital advice, wealth management, and analytics. It has gained notable momentum since 2018.
- The SMB category, which consists of startups focused on providing financial solutions to small- and medium-sized businesses, has also gained traction in recent years. Deals in 2020 included mega-rounds like HighRadius‘ $125M Series B, backed by Citi Ventures, and Jushuitan‘s $100M Series C, backed by Goldman Sachs and others.
- In 2015, US banks paid substantial attention to the blockchain & crypto category, making 13 investments to the category that year alone. However, the category’s momentum has since slowed among banks, drawing only 1 deal in 2020.
For more insights, see our full report on Where Top US Banks Are Betting On Fintech here.If you aren’t already a client, sign up for a free trial to learn more about our platform.