As part of Lendo’s reports on the fintech sector in Asia, we are bringing you some of the insights published by DBS Bank into what is happening in the Asia-Pacific region.
It starts by saying: “The wave of financial technology (fintech) has come at such a pace that within months, start-ups have the potential to turn into companies worth more than US$1 billion, known as unicorns.”
Furthermore, on a global scale, more than US$13.8 billion in venture capital (VC) was invested in various fintech companies in 2015 and there are 19 fintech unicorns worldwide capable of challenging banks.
In Asia-Pacific, China’s Alipay has made huge inroads into this sector and is now the world’s largest mobile payment company. While in India, a booming online payment segment has been brought on by e-commerce website PayTm, a household name capturing over 122 million users.
Other Asia Pacific countries such as Singapore, Indonesia, Malaysia, and Thailand have been experiencing less disruption, but it is expected that Singapore’s demographic of ultra-high net worth and wealthy individuals will help fintechs reach a tipping point in just two years.
One of its main observations of interest is this: “Developing countries in Asia have large young population who will rely on their mobile phones for all types of transactions.” The challenge fintechs face, DBS claims, “is to find a way to drive the experience beyond the mobile application or online site.” At the moment, the main focus in Asia is on fintech for the massive payments industry, but there is an opportunity for it to reach other areas of banking. As DBS says, “Innovation will continue to be a driving force in Asia as fintechs and banks both develop new platforms services for the increasingly connected consumers in Asia.”