Asian Fintech: What you need to know about the region

Markus Gnirck, co-founder of Tryb, a fintech consultancy focused on Singapore, has recently published a report on the development of fintech across Asia. Gnirck is also COO of the fintech accelerator network, Startupbootcamp.

After a tour of seven Asian regions last year (including Japan, Hong Kong and Vietnam), he visited them again this year to look at their growth sectors, and what these countries are doing in terms of financial innovation. These are the key findings:

Japan: Developing fintech expertise is the key to success

The government has set a revolution in motion, establishing a fintech community and instituting changes in regulation for virtual currencies. We expect further future fintech progress for wealth management and investment companies.

The weakness is that all research and development (R&D) is currently left to external experts. This makes it vital for Japan to maintain and develop its own pool of talent with fintech knowledge and experience.

Hong Kong: integration of specialist areas

The fintech ecosystem continues to grow, with over 600 people attending Asian fintech event, Finnovasia Conference, held in May. Target areas for fintech growth in Hong Kong include wealth management, banking, business solutions, and investment management. A supportive fundraising environment allows for fintech integration with other industries, such as medical care and IoT (Internet of things). Government cooperation is, however, noticeably lacking.

South Korea: rich in resources, but lacking willing investors

Korea Financial Telecommunications and Clearings institute (KFTC) and 16 South Korean corporations have joined forces to set up a mobile banking service, KakaoTalk. A large scale funding raise of $22 million has been successfully completed.

Growth areas include wealth management, big data and machine learning. With plenty of first class tech talent available, the banks are also enthusiastic about developing API systems for themselves. Unfortunately, there are few investors and banks with an interest in investing in South Korean fintech.

Indonesia: keen on large-scale investment, but few suitable start-ups

A number of banking licenses have been issued, and there are signs of willingness for a rapid move to digital. Banking major, Mandiri, has completed a $42 million fundraising; the Chinese-backed Alipay will launch soon.

Focus areas are settlement, investment, and digital. Investor interest is growing, but so far there is only one compelling start-up opportunity.

Malaysia: banks are proactive in collaboration but there are no significant start-ups

The Malaysian Securities Commission has set up a FinTech group; major banks have established incubators, accelerators and support programs.

There is activity in SME lending, international settlement, wealth management, banking, and business solutions. Many banks are interested in collaboration with fintech start-ups, but so far there are no stand out start-up opportunities available.

Singapore: No. 1 high profile fintech hub in Asia - aiming for broad ranging fintech development

Singapore has rapidly built up a strong position in fintech. It has noted a number of key areas for improvement ahead of a fintech festival to be held in November. All the major national banks are participating in support programmes and fintech research.

Fintech is extending its influence across a very broad range of specialty areas, from wealth management to machine learning, securities, and compliance.

Collaboration deals signed with the UK and Australia show that Singapore is extending its fintech influence overseas. By focusing these efforts, it hopes to make even greater progress.

Vietnam: growth companies aplenty (as recognized by Goldman), but regulation is a stumbling block

Momopay, the electronic payments business, secured its second round of funding from Goldman Sachs in March and is suddenly in the limelight. Payments, financing and digital will show strong growth in future.

The Asian Development Bank is considering offering support to Vietnamese start-ups. However, many incubator funds are reluctant to collaborate with Vietnamese start-ups, because of the tough regulatory environment. Unfortunately, this is a major obstacle to growth.

(By Sarah Voon)

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