Venture capital database CB Insights says 83% of the top fintech unicorns, worth more than $1 billion, are in the payments or lending sectors.

Within the past few years, the fintech industry recorded a huge growth in funding. The amount of new startups providing financial services is steadily increasing due to the ongoing development of new technologies and innovations.

Over the last year, investors poured over $18 billion into the fintech companies. The growth in investments has led to a rising share of fintech unicorns in the industry. Currently, there are 18 startups in the sector that are worth in total $56.5 billion.

According to CB Insights, a private company database offering information about angel investment, venture capital and private equity, 83% or 15 of the 18 fintech startups valued at more than $1 billion are in the lending or payments sphere.

Credit Karma, the financial management platform, and Zenefits, the cloud-based software platform, are the only non-payments or non-lending firms among the 10 leading finech unicorns.

The preference of lending and payments companies can be attributed to the fact that lending is a rather lucrative sector. Moreover, many of the current payment systems have a lot of drawbacks.

According to Globes, more than 12,000 fintech startups have been established globally, with a large number of accelerators being opened each day all over the world. Global funding in the industry has increased by 46% since 2010, reaching $13.7 billion in 2014.

Traditional banks have also acknowledged the potential of the new technologies that could significantly improve the financial system. During the last few years, banks all over the globe have formed fintech investment funds with about $1 billion in assets. Citigroup, Sberbank, HSBC and Santander have established investment funds valued at about $200 million.

More global banks embrace latest developments in the fintech sector by dealing with tech startups. A few days ago, Canadian Imperial Bank of Commerce (CIBC) partnered with an online loans provider called Thinking Capital. While CIBC will offer incentives to small businesses, Thinking Capital will approve and finance the loans.

“This partnership is about leveraging innovation to broaden the options for our existing business clients and attract new business and personal banking relationships to CIBC,” said Jon Hountalas, executive vice president of CIBC business and corporate banking.

The development of new technologies allows startups to compete with traditional banks in such areas as lending or payments. Unlike traditional banks, fintech firms based on online platforms offer customers a wide range of services, such as processing transactions and handling investments. So instead of competing, banks choose to cooperate with fintech companies to leverage their technology platforms.

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