Financial technology has seen big and tremendous growth in 2015.

According to Legal Business , global investments in fintech shot up from US$4 billion (AU$5.6 billion) in 2014 to over US$12 billion (AU$16.8 billion) this 2015, and is expected to reach US$46 billion (AU$64 billion) by 2020. The fintech industry is growing by innovating the financial services sector, and chipping away long, complex processes traditionally employed by financial institutions.

"When we talk to the banks, 2016 is the year of the use case. They all say there is something in fintech that we want to roll out. There will be a lot more launches in 2016. Some will be a success, and some will fall by the wayside," Brian Foran, a partner at Autonomous Research US, was quoted by Business Insider as saying.

The still-nascent fintech industry is at a tipping point. Many companies still need to think about and concretely identify the kind of business they had pursue and the value they aim to offer amidst the huge amount of investments. And the sector is on the right track. Incumbent players in the financial sector have started to invest in start-ups instead of competing with them, giving entrepreneurs a greater chance in the financial market. According to Tech Crunch , fintech company Sindeo gives a simple yet on point aspect of fintech. “We come from the mind-set that anything can be done. Then we figure out how to make it compliant,” Sindeo stated.

However, the fintech business is more than just a matter compliance. Algorithms, lending practices, financial process are all scrutinised by regulators. In the end, wobbly core and models of businesses will not pass scrutiny and ultimately, will not stay afloat. Silver Falcon (SILF:LN), a shell investment vehicle in the industry’s acquisition segment, is aware of this. It focuses on successful fintech companies as targets and by successful, it means that these companies must be making revenue, has a significant client base and has a working, proven product.

“You will know that it works. Everything works, it’s not just idea. It’s a proven company and it has been around for a while. And the upside of that, what I can tell you is that with those criteria, those requirements, it will scale hugely,” Silver Falcon CEO Adrian Beeston stated.

Given that, the share of global fintech investment is still up, with established firms and more promising start-ups entering the fray. The industry is growing in two ways: geography and sectors. The main bulk of fintech shares comes from the US. However, Europe is becoming more active as well, with London experiencing its emergence as hub of fintech companies.

Fintech financing is also smoother and more accessible in the US rather than in Europe, with US firms getting around 80 percent of global investments. However, since 2008, financing in and around London has been growing at twice the rate of the Silicon Valley. Financial technologies in relation to payments, banking and lending are in demand.

This can be an immediate threat to banks. According to Forbes, merchant acquisition and lending services will be heavily disrupted in the future. Furthermore, as much as 30 percent of banks’ revenues is potentially at risk due fintech innovation in banking, payments and lending.

Company cycles and competition for disruption getting tighter, fewer firms and start-ups will be able to remain in top game. They will require increasing dynamicity and responsiveness to keep up as fintech regulation remains a big hurdle around the world. However, such challenges will also provide one of the greatest opportunities in the sector. It is essential and crucial for regulators to design policies that work for start-ups and allow improvements based from countless data, all while still providing customer and consumer security.