How will mergers and crypto regulation reshape APAC fintech investment in H1?

Chinese fintechs will embrace "dual-market routes" to grow overseas.

Overseas growth ambitions, possible consolidations, and cryptocurrency legitimisation will shape the financial technology (fintech) landscape in H1 2026, according to KPMG.

Investors are expected to remain cautious in the first six months of the year, driven by the protracted economic slowdown in China and increasing concern related to inflationary pressures in Australia, according to KPMG’s Pulse of Fintech H2 2025 report published in February 2026.

China-based fintechs are expected to replicate domestic payment and microcredit models in emerging markets by embracing “dual-market routes” to grow overseas.

Australian financial institutions, meanwhile, are expected to partner with fintechs that will “help them drive efficiencies and cost reductions,” KPMG wrote.

“Across the fintech landscape we’re seeing some of the smaller providers looking at consolidation to drive scale and maintain relevance, as well as broaden capability amongst firms targeting slightly different parts of the market and customer cohorts,” said Daniel Teper, partner, M&A and head of fintech at KPMG Australia.

Consolidation deals of this manner create more longevity, profitability and sustainability, Teper said.

APAC-wide, expect to see the growing regulatory legitimization of cryptocurrencies, stablecoins and digital assets in different jurisdictions, except in China, according to KPMG.

Digital asset capability is expected to scale in Japan, South Korea, Singapore and Australia.

AI will continue to be a key focus of investors in the region, particularly generative AI and agentic AI applications, the report said.