Latest landscape of Asian fintechs

The landscape of Asian fintechs will be governed by the transformation of financial institutions and  reshaping  of their future paths, according to Nelson Chow, Chief Fintech Officer of Hong Kong Monetary Authority.

Nelson and other fintech representatives from some Asian countries including HK, Singapore, Thailand, Japan, and Philippines shared their views and updates in a recent virtual conference namely “Hong Kong Fintech 2025 Opportunities for Asian Fintechs”.  The opening remark begins with a 5-year roadmap strategy towards 2025 covering 5 key focus areas in Banks and Fintechs, Central Banks Digital Currencies (CBDCs), Data Infrastructure, Fintech savvy workforce, and Funding and Policies.

Chonladet Khemarataana, President of Thai Fintech Association said that post-covid19 impact has caused the most significant and dynamic changes in Thai financial ecosystems.    Thai investors have already jump started in new emerging financial services via internet and mobile banking services, for example, buy and sell stocks, mutual funds, other digital assets.  “All banks go fintechs” trend with increased speed of adoption and fast growing embedded finance propositions such as buy-now-pay-later services, digital assets, digital lending are in the next move, mentioned Ms. Sng Khai Lin, VP, Singapore Fintech Association.

International cooperation among central banks in Asian countries should be encouraged to launch their own Digital Currency in order to stimulate and grow cross border trade and financial benefits with secured, faster, lower transaction costs and real time to end users and the whole region.

Global central banks are now gearing towards the development of their own versions of digital cash.  China is the most ahead with its digital yuan which will be mainly used domestically.  Also, in the latest news update, the multiple central banks digital currency bridge project (mBridge), developed by the Bank for International Settlements Innovation Hub and joined by central banks in Hong Kong, Thailand, China and the United Arab Emirates, has achieved  a prototype that reduces the time of international transfers to seconds from days by using distributed ledger blockchain technology (DLT).

Data infrastructure is one of the key areas to be enhanced and developed among Asian countries to unleash full potential for the next generation of banking including Commercial Data Interchange (CDI), digital corporate identity, DLT-based credit data sharing platform at a single point with scalability and to further enhance financial innovation, said Nelson.

CDI, a consent-based financial infrastructure that would enable more secure and efficient data flow between banks via data providers (ie fintechs, utilities, payment gateways) and data owners (consumers and businesses).   CDI is to reshape the open banking protocol, to create secured and trust sources, and to facilitate Regtech Adoption Practice Guide, with focus on anti-money laundering/combating the financing of terrorism.

In Phillipines, Regtech will facilitate and ensure the  proper Know-Your-Customers (KYC) process as demands for digital financial services remain promising, commented Mark Vernon, Vice Chairman, Fintech Philippines Association.  The national digital ID is being rolled out.  Cashless society, digital banking and online payment solutions are tremendously increasing during this covid19 impact.

Tech-savvy workforce  are another key challenging area that Asian fintechs are facing and it requires financial services and tech partners to collaborate each other.   In Thailand, the key success factor of tech giants or fintech startups is to partnership with large corporates to gain advantage over local business insights.  Chonladet mentioned that it is difficult to find tech talents in Thailand. 

Social banking and digital lifestyle ecosystem trend has proven success stories of superapps Line, Grab, Shopee, FinVest in partnership with Kasikorn Bank to provide fintech innovation such as lending, investment, e-wallet, ecommerce to Thai consumers.  

Fintechs which can find the right partners with well-supported funding and synergies have been able to turn their ideas to success stories.  Funding issue is one of the key focus areas in this 5-year roadmap towards 2025.

In Japan, Takeshi Kito, Vice chairman, Fintech Association of Japan adds that fintech ecosystem has been accelerating and high usage in various sectors especially business-to-business (B2B).   Many fintechs are now listed in the Tokyo Stock Exchange.