BY Fraser Tennant
The FinTech market in the Asia-Pacific region is growing significantly and set to reach a value of $72bn by 2020, suggests new data from Frost & Sullivan.
According to the firm, the positive outlook for the FinTech industry in the region is being fuelled by a growth in digital payments, such as increasing adoption of cashless payments by small and medium sized enterprises (SMEs). Also, there is more widespread awareness of the viability of using P2P financing as well as new methods of crowdfunding using Blockchain, which Frost & Sullivan believes will lead to growth in the personal and business financing segment.
Furthermore, new innovations are expected to radically transform the way consumers shop, pay, perform banking transactions and purchase insurance. The wave of new FinTech technologies is also changing customer behaviour and interactions today.
Speaking at Frost & Sullivan’s annual review and outlook for the FinTech industry in Asia-Pacific, Spike Choo, consulting director in the firm's ICT Asia-Pacific practice, outlined the emerging trends in FinTech for 2018, making special mention of his expectation that more innovative FinTech services will be launched in the areas of financial investments and advisory services, as well as insurance due to advances in Big Data analytics, artificial intelligence (AI) and blockchain.
Much of the growth being seen in the region’s FinTech ecosystem is a result of the active support and initiatives provided by financial regulators such as the Monetary Authority of Singapore (MAS), Bank Negara Malaysia (BNM) and Bank Indonesia (BI), noted Mr Choo.
A major feature of Frost & Sullivan’s review and outlook was the future of cashless payments in Singapore. According to Quah Mei Lee, industry principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth $1.4bn in 2017. Although the market is still small, Ms Mei Lee there are many supportive regional and local regulations and initiatives that will help Singapore move towards a cashless society. Ms Lee was also keen to stress that mobile payments of the future needs to be global first, inter-operable and secure, with global alignment being key to mobile payments going mainstream.
Rounding out the firm’s FinTech industry outlook was a focus on customer experience (CX) in the banking, financial services and insurance (BFSI) industry. According to Nishchal Khorana, Frost & Sullivan’s consulting director, ICT, Asia-Pacific, a successful CX strategy would be based on an integrated approach to people, processes and technology in the digital era.
Transformative, informative and innovative, it promises to be an exciting year ahead and beyond for FinTech in Asia-Pacific.