Kishan Singh

Here are Some Emerging Bright Spots in Fintech Innovation in Asia (https://e27.co/emerging-bright-spots-fintech-innovation-asia-/) The past one-and-half decade saw Asia wake up from slumber to turn into one of the hottest startup destinations. Although Silicon Valley still continues to hold its number one position in terms of attracting businesses and talents from across the world, Asia has a different tale to tell. China’s overtaking of Japan as the world’s second largest economy, the significant rise of India as a leading market for world’s big businesses and positive economic trends in South East Asian countries somewhere reflects the impressive growth story of Asia. The fast growing Fintech industry is another feather in the cap of rising Asia. According to EY FinTech Adoption Index 2017, there is a palpable global shift of fintech activities from the UK and the US to Asia. Since, we are also noticing that the world economy is not in its best shape, the coming days will probably see a further contraction of the economy. However, the good news is that the fintech industry could pretty well save the markets from a possible onslaught of future recession. Another report provided by KPMG and CB Insights says in 2016, investments in Fintech companies in Asia hit $8.6 billion across 181 deals. The Asian landscape appears to provide a fertile ground for fintech startups to explode further, which clearly signifies that the Asian startup revolution has successfully grabbed the financial services sector. Part of this success post 2010 can be accrued to the bold steps being taken by the fintech companies to engage with emerging innovations. For the past couple of years itself we have witnessed how, especially in Asia, there is a sharp growth in disruptive sectors such as mobile payments, money transfers, loans, fundraising, online lending and investing services, digital investment banks and even asset management. People are increasingly realizing the need for easy payment processes, reducing fraud, saving money, and promoting financial planning. Also in Southeast Asia, many reports have already suggested that governments are waking up to the opportunity and supporting Fintech innovators and investors. The Bright Spots Singapore Leading from the front, Singapore is evolving into a prominent fintech hub in Asia. Had it not been for the government and the Monetary Authority of Singapore (MAS) working in close coordination and collaboration, the flourishing Fintech ecosystem in the country wouldn’t have been a reality. In 2016, the Lion City took numerous initiatives, including the development of a regulatory sandbox for Fintech companies. It was an important initiative for arranging funds in order to encourage corporates to collaborate with Fintechs, along with hosting vital Fintech conferences. As a result, the country has gained momentum and a considerable comparative advantage in terms of regulatory comfort, geographic positioning and talent access. In addition to that, the city-state aims toward becoming the world’s first Smart Nation and in view of this, the central bank and MAS have kept Fintech as one of its topmost priorities. The inaugural Fintech Festival in November 2016 was a huge success as thousands of people accessed it through webinar software. On this occasion, the Managing Director of MAS, Ravi Menon effectively highlighted the need for economic growth and innovation in the country. “In an industry facing the headwinds of lower economic growth and heavier regulatory burdens, innovation must be the way to refresh and re-energize the business model”, Menon said. Hong Kong is not far behind from Singapore in challenging leading financial hotspots like London and New York in order to establish global supremacy as far as fintech is concerned. With the unexpected incident of Brexit referendum, Hong Kong can now fancy its chances of attracting more investments. It has nevertheless been one of the traditional finance centers of Asia and is aiming to do equally good in fintech as well. In light of this, fintech innovation labs and fintech accelerator/incubator spaces are rapidly growing throughout Asia, especially in Hong Kong. The FinTech Innovation Lab Asia-Pacific is collaboration between Accenture and leading financial institutions including Bank of America, Merrill Lynch, Goldman Sachs, HSBC, J.P. Morgan, and Standard Chartered, etc. Furthermore, the Honk Kong Monetary Authority (HKMA) has announced important plans regarding a ‘Fintech innovation hub’. This is an ambitious plan where new financial products and services will be created and tested. The Hong Kong Fintech innovation hub is readying itself to work on emerging technologies such as biometric authentication, facial recognition, voice recognition, and big data. China In terms of Fintech adoption rates as well as investments, the Chinese fintech venture capital market is growing considerably. China will not let this opportunity go by as it understands better than a lot of other Asian countries do. The consortium of certain Chinese state-owned companies has established a forum called “Asia FinTech Merger and Acquisition Fund of Funds”. The body’s basic objective is to support innovative Fintech startups and technologies. It will also ensure that every market in this industry will operate with necessary capital. A bout of high-profile mega-rounds in the Chinese market has also played a vital role in uplifting Fintech investment. One such activity was a whopping US$4.5 billion funding round by Ant Financial, an affiliate of Alibaba group. The other smaller but successful funding rounds in China during 2016 were: US$73 million to Quant Group, and US$30.4 million to China Rapid Finance. After this fast domestic success, Chinese Fintech players are not shying away to show their global ambitions. India India is also a fast emerging ecosystem for Fintech startups. It has witnessed a robust growth from traditionally competitive market to more collaborative one. According to a recent research conducted by Startupbootcamp FinTech Mumbai and PwC, it was found that more than 95% of financial service companies are seeking partnership with Fintech startups through collaboration rather than competing with them. Another report regarding Indian Fintech ecosystem is more interesting. It says Indian Fintech market is expected to double from current US$1.2 billion to US$2.4 billion in 2020. The key drivers of Fintech growth in India have been rising customer expectations, e-commerce and smartphone penetration. During the past couple of years, the funding has also been risen in India in the form of angel deals. Conclusion The road ahead for the fintech ecosystem in Asia is quite promising. Artificial Intelligence, Data Analytics, Big data and blockchain technology are the preferred bets for Fintech investors in Asia. Fintech has started covering a wide range of businesses, which means increased potential for companies in world’s most populous demographic region. Thus, the Asian fintech industry is certainly on the verge of creating history.