Southeast Asian Countries Hotbed For Fintech
Big players in the fintech industry will soon flock to Southeast Asian countries where the market is booming for 2019, according to a report from online lending platform Robocash conducted in partnership with Deloitte.
The report said that fintech investments in Southeast Asia increased by more than 20 to 30 percent in 2018 compared to 2017. The region had, in fact, welcomed 5.7 billion fintech investments in 2017 despite the technology was not yet well-developed in the region.
Executives and experts who were interviewed for the report said Southeast Asia has 94 percent chance of having more fintech developments in the coming year. In comparison, North America is expected to have 96 percent of new fintech opportunities while Europe is pegged at 92 percent. Latin American region falls behind at 81 percent.
Eighty-nine percent of the companies surveyed for the report believed that the lack of banking services in most ASEAN countries made the region the hotbed for fintech development.
The attitude of the people living in the region is also crucial for fintech companies to penetrate the region. For context, 82 percent of the Southeast Asian people are open to embracing fintech solutions while only 77 percent of the North Americans, 76 percent of the Europeans and 49 percent of the Latin Americans have a similar attitude toward the technology. Even Southeast Asia's fintech-related regulatory approvals more flexible at 79 percent compared to 71 percent in Europe, 63 percent in Latin America and 62 percent in North America.
The segments expected to reap the rewards of the burgeoning Southeast Asian market are online lending and online credit platform.
To understand the massive market potential of the region, one has to note that most Southeast Asian countries are still developing nations. This naturally attracts the expertise and technology of the big players in the fintech industry, hence, more investments are being brought in the region. For context, there is only 52 fintech technology currently being developed in Southeast Asia, 190 in North America, 59 in Europe but investments are more competitive in Southeast Asia.
The market potential of consumer lending and P2P/marketplace in the region is estimated to be valued at $824.6 million in 2017, Robocash said citing a separate report from the Cambridge Center for Alternative Finance. The estimated amount excluded China which currently attained a position where it could be considered if not the number 1 is one of the top 5 countries in term of fintech development.
For one, four of the multibillion-worth fintech startups had their roots in China. One of these is Ant Financial which is backed by tech giant Alibaba. Ant Financial is the world's largest unicorn with a market valuation of $150 billion.
The hottest market for more fintech developments would be India where 52 percent of the population has used fintech at some point.