How is Fintech influencing Asia Pacific?

Once thought to be a far-distant future, fintech’s integration into society is now a reality. We now live in a highly advanced era where fintech-based solutions are simpler, easier and more transparent.

Globally, fintech investments recorded a massive surge in 2019, and it is notable that most of these investments came from Asia Pacific (APAC) countries. Accenture reports that the figures doubled to USD55.3 billion with APAC countries contributing a larger share in the growth including countries like Australia, Japan and Singapore.

Fintech will continue to be a growth leader in the economy but what are the trends that are surfacing?

Money transactions without a bank account or ID

Remittances between bank accounts are overwhelmingly common money transactions. However, the most common challenge that banks face is the cost of the transfer procedure with high transfer fees imposed. For this reason, an increasing number of companies in APAC have introduced services that allow remittance at lower costs.

This is a commitment that countries with a large population of immigrants and refugees should consider as most of them do not have a domestic bank account. For example, 1.5 million people in the United Kingdom were reported without bank accounts. Cash is king because many foreign workers do not want a bank account or an ATM card due to minimum sum requirements imposed by most banks.

To ease this, countries in APAC like Singapore have adopted blockchain technology which allows for users to create a clear ledger of transactions within the compound, where exchange of digitalised currency can be recorded.

By enabling financial transactions with the support of technology, this would help reduce barriers to monetary transactions, promote stability and increase new businesses in new terrains. This is especially so for a region like APAC where foreign talent are expected to increase in the future. Fintech will play an increasingly important role to complement its existing financial system.

Reducing barriers for starting a business

Starting a business from ground up can be a daunting task when costs are high. In addition, traditional bank loans are often a tiresome process with time delays for approvals.

As such, new forms of financing have grown and this is especially prominent in the digital lending scene. Anytime Loans, an automated P2P lending platform in APAC uses AI to read facial features and feed it into a predictive model that determines the borrower’s propensity to default. IBM is also using its tech arm to deploy software robots that are configured to capture and interpret information from systems, recognise patterns, and run business processes across multiple applications to execute financial activities in the region.

Comparing this trend globally, Funding Circle has become a leading platform for investments in the United Kingdom, the United States, the Netherlands and Germany. It is also currently said to manage USD4billion worth of loans worldwide and is one of the fintech companies that has contributed to economic growth and the creation of jobs across the globe.

Is the old banking era over?

The positive impact that fintech could bring is immeasurable and the examples presented above are just a few of them. With further deregulation and improvements in areas such as security, customer experience, and transaction transparency, one can expect a smoother exchange of monetary flows. Traditional banks who are resistant to change may face a huge loss against triumphing fintech start-ups.

Although such banks have built a solid foundation that is unmatched by emerging forces with their experience, huge customer data library, and long-standing customer relationships, they need to gradually break away from their conventional ways to embrace the digital wave. In this way they can continue to remain as big players in the fintech field.

How can Huxley help you?

Huxley has over 25 years of recruiting history in the banking, financial services and technology sector. In addition to a strong network of candidates building a career in financial IT, we have built strong relationships with our client companies too. With our niche and bespoke approach, we understand in great depth what barriers companies face when hiring and we aim to propose the best solution that can suit their needs including sourcing for the right fit.

If you are looking for the right talent that could take charge of your next project, or if you are a specialist who is interested in pursuing a career within fintech, do contact us through the form below. For more industry related updates, do follow us on our Linkedin page.