Investments in financial technology (fntech) in the Europe, Middle East and Africa (EMEA) recorded $4.6 billion in the first half of 2020, while global fintech investments dipped to $25.6 billion, according to a report on global fintech investment trends from KPMG International.

The report said that much of the fintech investments in this region were made in early-stage startups, expecting that the fintech market in the Middle East region will further expand and diversify for the foreseeable future with key jurisdictions investing in fintech ecosystems.

Overall, VC investment remained robust in the first half of 2020, according to the report, however, new deal activity slowed down dramatically during the same period, except in high-priority sectors like payments. The reports adds that platform businesses have piqued investor interest, particularly in less mature fintech markets.

“The UAE government has moved forward with a number of initiatives to help and foster the growth of fintech. The RegLab, a sandbox style programme, is a big part of this effort, in addition to programmes like accelerateHER to promote diversity in entrepreneurship. These, combined with startup funds, are likely to be a big part of developing the UAE’s fintech ecosystem over time,” said Abbas Basrai, partner and head of financial services at KPMG in the UAE.

Globally, the mergers and acquisitions (M&A) investment has also seen a sharp decline, the report stated. It adds that M&A accounted for just $4 billion of fintech investment in the first half of 2020, compared to $85.7 billion during the same period last year, which reflects a general slowdown in deal activity, and investors’ lack of appetite in funding major deals amid global uncertainty triggered by Covid-19.