According to a poll of 27,000+ digitally engaged consumers in 27 markets, Asia is the worldwide leader in fintech. Across Asia, China and India are market leaders, with more than half of their active adult customers using fintech services on a daily basis. Asia leads the trend, and it shows no signs of slowing.
In Southeast Asia, digital financial services generated $11 billion in revenue in 2019. This is anticipated to increase to more than $38 billion, or 11% of total financial services revenue, by 2025. Demand for fintech solutions is higher than ever, therefore 2021 and 2022 will be critical years for maintaining relevance and introducing new innovations.
Digital finance, mobile payment, and, of course, blockchain are all key topics. And not everything relies on machines – Asia’s huge workforce will remain a critical part.
The COVID-19 epidemic compelled businesses to enhance their automated services. In China, Alipay has launched digital solutions to assist small companies in Wuhan. This contributed in recovering the city following the severe lockdown.
In 2020, Malaysia introduced WeChat Pay. It is the first country outside of China to adopt WeChat in its own currency. Local banks like as Hong Leong Bank and Maybank were ready to join forces. This concept might be extended by WeChat to other platforms.
ZA Bank Ltd was the first virtual bank in Hong Kong to provide a digital-only banking service. It provided a 6% opening rate on all deposits.
Nevertheless, Japan, which has been slower to adopt cashless transactions, saw app-based payments become commonplace in 2020. There are several choices when it comes to digital payments, including Rakuten Pay, LINE Pay, and PayPay backed by the SoftBank Group. For the past two years, the country was overwhelmingly cash-based.
Vietnam has experienced the biggest expansion, with mobile payment users rising by 24% in the last year. Thailand had a 67 percent adoption rate. China remains the leader, with 86 percent of people using cell phones to make payments.
In Southeast Asia alone, there are at least 150 e-wallet companies. The majority of these applications are operated by internet behemoths such as Grab, Tencent Holdings, Singapore Telecom, and AirAsia.
Because in-person banking was frequently limited or unavailable, the epidemic accelerated the uptake of fintech banking applications and solutions. Online banking has evolved. As evidenced by the Singapore Exchange, the tendency has expanded to investing (SGX).
Singapore Financial Data Exchange answered by launching the world’s first public-private open banking solution. Singaporeans could now hold rein of their finances in one simple platform.
Besides, the remaining Asian countries are also taking into consideration the plan to establish open banking structures. Notably, DBS Hong Kong introduced digital banking to deliver easy access and less paperwork for SMEs.
Financial inclusion, according to the World Bank, is an excellent method to decrease poverty and enhance economies. The role of industry as a financial leader is critical in developing and emerging countries.
South Asia has some of the lowest levels of financial literacy in the world, but Asian fintech firms are working to alter that and boost financial inclusion. Julo (Indonesia), ZigWay (Myanmar), and Wing are among them (Cambodia). They've created simple games and tools that teach people how to spend, save, and invest more wisely.
In terms of financial inclusion, Jeff is a Vietnamese app that offers lending services. The app promises to provide financial services to those who are likely to be turned down by traditional lenders.
The future of blockchain and cryptocurrencies can be found in Asia. According to NASDAQ, East Asia accounted for more than 31% of all bitcoin transactions from mid-2019 to mid-2020.
Asia is a crypto mining hotspot, with China accounting for 65 percent of the worldwide Bitcoin hash rate. Altcoins are widely used in the South Korean market, with more than 30% of convenience shops currently accepting digital money. There are also big crypto exchanges in Asia that trade at roughly four times the volume of exchanges in the United States.
The mobile game Axie Infinity is helping to lift people out of poverty in the Philippines. It is a farming simulation created by a Vietnamese firm. Its currency is the Ethereum Blockchain, which helps players learn about the currency, and how to manage their finances.
COVID-19 prompted many firms to digitize, causing employment trends to change. Software developers are in great demand in Singapore, where there is net job growth. In Hong Kong, there is also a greater demand for competent fintech personnel.
Other countries are also on the lookout for tech expertise. According to CXC Global, companies in Thailand, Japan, and Hong Kong are looking for data scientists and web communicators.
Firms, on the other hand, are not rushing to replace workers — 37 percent of companies in the Asia Pacific are ensuring that employees are on board with changes and that RPA duties are specified.
Fintech uptake in Asia continues to grow as it becomes a part of everyday life, regardless of economic position. The APAC fintech market is anticipated to develop at a 72.5 percent annual rate through 2025, demonstrating dynamic growth and adaption at rates that Western nations may not be able to match.