Chinese venture capital fintech investment soared, doubling its share of global fintech venture capital investment in 2016, according to a recent report by Citi. In the US, venture capital investment continued to diversify into new areas of fintech, with insurance (InsurTech) and wealth management seeing increased investment.

In 2015, as a share of global fintech capital investment, 56% was made in the US, with only 19% in China. However, as of September-end 2016, that number had dropped to 41% in the US, and more than doubled to 46% in China.

“It is no surprise to us that China accounted for over 50% of total fintech investments globally in the first nine months of 2016, and was the only major region where fintech investments increased in 2016 – in fact doubling in China in the first nine months of 2016 versus the same period in 2015,” the report states.

Factors such as rapid digitalization, the rise of the Chinese middle class, and poorly prepared incumbent financial institutions faced with e-commerce entrepreneurs, help explain the rise of venture capital investment in China.

The fintech areas which receive venture capital investment are also changing. Insurtech saw a lot of activity in the US, replacing lending as a key area of investment in 2016. Wealth management also saw a dramatic increase in investment.

In the US, lending received 20% of VC investment in 2016, dropping down from 58% in 2015. Whereas VC investment in payments rose from 11% in 2015 to 14% in 2016; in blockchain 3% to 8%; in insurance 0% to 34%; and in wealth management, 0% to 7%.

Investment is shifting towards business-to-business based business models in the US, while China continues to focus on business-to-consumer based business models, as vast opportunities in consumer finance remain untapped by banks.

Citi predicts that “Alipay will grow internationally as it follows the ongoing expansion of overseas Chinese tourism. The harder call is how many non-Chinese clients Chinese companies, like Ant Financial and WeChat, will gain in payments and associated products.”