ASEAN is the most advantageous region for the development of fintech

The recent report from Deloitte conducted in partnership with Robocash Group stated that ASEAN countries have the highest potential in the fintech market up to 2020. The advanced landscape facilitates both the development of financial technologies and the inflow of investments expected to increase by over 20-30% in 2018 compared to the previous year.

Although many ASEAN countries are still emerging markets, the insufficient financial inclusion has become the main driver for the industry and allowed to bring in the advanced expertise and technologies from the developed markets. Despite the average level of the current fintech development in ASEAN (52) is lower than in North America (190) and Europe (59), the local industry has proved its competitiveness in terms of investments. In 2017, fintech in ASEAN gained US$ 5.7 billion that was one quarter less than in the USA. In 2018, the market expects to see the growth by over 20-30% considering the results in the first quarter of the year.

More than 60 private fintech firms shared their views on the factors facilitating or hindering the fintech development. The poll revealed that the market capacity is the main driving force for the industry globally. Most respondents were positive about its opportunities in North America (96%), ASEAN (94%), and Europe (92%) and considered Latin America to fall behind (81%). At the same time, 89% of surveyed companies mentioned that the low penetration of banking services brings ASEAN countries to the forefront in the development of financial technologies and this is less relevant for Europe (84%), North America (82%), and Latin America (61%). Furthermore, many experts pointed on the openness of ASEAN customers to new technologies and products facilitating favourable changes in the technology ecosystem (82% vs. 77% in North America, 76% in Europe, 49% in Latin America) and regulatory initiatives (79% vs. 71% in Europe, 63% in Latin America, 62% in North America). Altogether, these factors promise to boost significantly the development of fintech in ASEAN in the mid-term perspective (one-three years) already.

According to Deloitte, online lending is regarded as the most promising direction in Asia owing to its contribution to a better financial inclusion. To be mentioned that Cambridge Centre for Alternative Finance also stated the potential of the market in its recent report about fintech in APAC estimating p2p/marketplace consumer lending in Asia Pacific (excluding China) at US$ 824.6m in 2017.

“As the company operating both in the European and Asian online lending markets, we see that ASEAN successfully follows the global trends. High Internet penetration and mobile connectivity make local fintech firms aim at providing intuitive, accessible and effective solutions. We actively invest resources and time in customer verification, process streaming and automation that involve the use of artificial intelligence and big data. Fintech is a rapidly changing industry and inevitably brings in positive changes to the market. However, technologies connected with scoring, personal finance and other areas will definitely stay in focus in the long-term perspective,” – comments on the study Sergey Sedov, CEO of Robocash Group.