In the US, total funding fell from $27 billion to just $12.8 billion, while the total number of deals was down from 615 to 489, a drop blamed by the report on political and regulatory uncertainty, a decline in mega-deals and investor caution.

Funding for FinTech companies around the world declined significantly in 2016. American and European firms experience a particularly sharp drop in investment, according to a report from KPMG and CB Insights, which nevertheless predicts an increase in 2017. Total FinTech funding declined by almost 50%, falling to $25 billion in 2016 from $47 billion in 2015.

For Europe, the picture was even bleaker, with total FinTech investment dropping 80% from $10.9 billion in 2015 to $2.2 billion last year. Europe's FinTech leader, the UK saw deal value down from $4.6 billion to $654 million, although transaction volume remained steady.

KPMG says that London continues to be seen as a true global financial center with a vibrant tech startup sector and that, while Brexit-related uncertainties are a concern, 2016 is likely to be just a time when investors "paused for breath".

In fact, KPMG is bullish about FinTech's prospects on both sides of the Atlantic, highlighting the "game changer" that is PSD2 in Europe and the rise of insurtech and new technologies such as blockchain, AI and the Internet of Things.

Meanwhile, Asia, led by China, was one part of the world that held steady last year, with deal funding reaching a new record high of $8.6 billion invested compared to $8.4 billion in 2015. Just three mega-rounds accounted for over half of the total.

According to the KPMG, innovative startups network co-leader Brian Hughes, 2017 is likely to be a pivotal year for FinTech in the US and around the world. The reason is valuations have corrected, the market has set up a perfect storm for IPOs and M&A to happen in 2017. An increasing number of exits will likely stimulate demand for new investments thanks to the dry powder already in the market.