Fintech in Southeast Asia

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The fintech chant that started as a tiny whisper, can now be heard resounding in almost all corners of the world. What’s more is that this chant is now being accompanied by drums and trumpets, owning its presence and how! The innovation spree in this industry has been the mainspring of this revolution, where companies have created and recreated technology that has made the world a lot smaller, in a good way.

However, with such galore, comes raving competition.

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Highlights in Southeast Asia’s Fintech

The CAGR of fintech is reportedly perched up at a stupendous 25%, rendering it to be the fastest growing industry today. In 2020 alone, the US had 8,775 fintech start-ups. By 2021, the number of start-ups had gone up to more than 11,000 in America, 6,500 in the Asia Pacific, and almost 9,000 in EMEA.

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The Asian fintech market has witnessed a leaping progression in recent times, as some of the biggest players are rooted right here. Alipay, owned by Ant Financial in China, is the global leader in fintech. What started as simple eWallet solutions, has now transformed the face of fintech and found its niche in people’s everyday routines. They offer ePayment solutions, wealth management, investments, eBanking, international payments, and much more. With a vast network of operations in 40 countries, Alipay has claimed the position of the world leader in this industry.

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Talking of leaders, the UK has been at the forefront of fintech globally; London becoming the hub, with the highest fintech index, closely followed by San Francisco and New York. In Asia, the fintech market has found its pivot in Singapore. 

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‍Singapore City is a financial fulcrum, and it is no new revelation that it is one of the leading fintech cities. More than 40% of Asia’s fintech are based here and the funding of fintech start-ups has multiplied by more than three times in the past 5 years. 

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Grab, the leading fintech giant in Southeast Asia is an amalgam of delivery services and payment solutions. It has expanded its operations across several countries including Singapore, Indonesia, Thailand, Malaysia, and more. Its service suite, which started as simple food delivery, has now branched into finance and payments, which include lending and investments too.

For Visa clients in Singapore, a partnership between Railsbank (London) and Visa has prompted the enablement of visa payment technologies, allowing easy on boarding along with spectacular fintech benefits and access. Now, clients in Singapore can avail of Railsbank services too.

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India has not been far behind in this pyramid of fintech leaders. The consumer shift towards fintech in India has been parallel to that of China, with both countries reporting an 87% shift into digitalization. The Indian cities of Bangalore and Mumbai have exponentially grown vis-a-vis fintech. 

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Razorpay is the key player in India, which allows businesses to process payments with its elaborate suite. Founded in 2013, with a solution-driven focus, the company has received total funding of more than $750M USD which has powered its aggressive expansion. Paytm, another fintech in India has become the most reliable and used e-payment gateway for the enormous Indian population. With a revenue of almost $420M USD, this company too is charging ahead in the race.

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 Indonesia has attracted quite a big chunk of fintech funding, making its presence unmissable in this market. The GoJek digital payment solution has transformed into a lifestyle platform, allowing users to book taxis, order food, make digital payments to other vendors, etc. GoJek is a well-established fintech organization, competing with the likes of Rapyd (London) and Affirm (San Francisco).

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 The Thailand fintech market also has been in the news with its e-payment platform, PromptPay. The fintech platform that allows easy payments using personal data for verification purposes, has recently tied up with Rapyd, the London-based fintech, that has launched PromptPay services on the Google Play Store, enabling Thai consumers to install the app and make in-app purchases with ease. 

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Hong Kong too has found a place among the top fintech hubs in the Southeast, followed by the Malaysian capital, Kuala Lumpur. Immunity from Covid?

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While Covid-19’s fatal impact echoed all over the world, affecting all segments and countries, especially in terms of finance, Singapore’s destiny was earmarked for gains. Investors took particular interest in the potential scope of Singapore’s finance market, fueling its engine with private investments. The businesses that started off as simple e-payment solutions and quick personal loans have branched out into a wide array of services, including investments, wealth management, payment and remittances, reg-tech and data analytics, and more. Owing to the market being emergent still, the majority of Singapore fintech start-ups are in the early stages of business. 70% of the start-ups have thrived on Seed or Series A investments.

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Closing WordsThe fintech fraternity in recent years has witnessed an uprising like no other industry. While the UK and USA lead the way today, the extent of innovation and consumer shift seen in Southeast Asia remains unmatched. The engine has just caught its momentum, if fueled right, the market dynamics here might just thwart forward and acquire reign eventually.

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