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Creating a space for FinTech in Southeast Asia

Aidil Zulkifli, CEO and Co-founder, UangTeman | March 11, 2016
Aidil Zulkifli of UangTeman discusses how to nurture the FinTech industry in a dynamic region such as Southeast Asia, and how it can increase financial inclusion for the unbanked.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

The fintech industry has taken off in Southeast Asia at varying degrees in different regional countries. One thing is for sure, everyone in the region is talking about it and fintech is here to stay. Countries such as Singapore are all looking to carve a piece of the fintech cake for themselves. Just last year, the Monetary Association of Singapore (MAS) committed S$225m to fintech growth, and Minister in the Prime Minister's Office Chan Chun Sing has also recently lauded fintech and sees it as a tool for future growth in the republic. Established finance players from conglomerates to banks are all jumping onboard the fintech train, which seems to be headed on a one-way track to success.

Singapore as a B2B fintech market

However, it is not as straight-forward as it seems, especially in a region like Southeast Asia, where there is a large diversity of financial markets that all have their own rules, regulations and cultural sensitivities to contend with. Fintech that aims to primarily profit from and support businesses are great for a mature market environment such as Singapore. The market is already a regional finance hub and it makes sense to invest in Business-to-business (B2B) fintech that would support the development in areas that fuel the growth and innovation of those specific financial verticals.

The emerging markets : the B2C fintech growth

Then there are fintech startups that focus more on individual consumers and effecting change at the grassroots level, which I will classify as Business-to-consumer (B2C) fintech. These work better for large-scale economies in emerging markets. Two billion people in the world don't have access to formal financial services, and in this region, Indonesia is a clear representation of this unbanked population - according to World Bank, 40% of Indonesians still live below the poverty line or are in danger of falling under it.

According to the 2015 Brookings Financial and Digital Inclusion Project Report, the move toward digital financial services will accelerate financial inclusion in emerging markets that often lack established finance systems. Indonesia has seen a wave of fintech startups in the past year and Financial Services Authority of Indonesia (Otoritas Jasa Keuangan) (OJK) has moved to increase support for the industry with the creation of a technology board on the Indonesian Stock Exchange (IDX) to enable financial and technology (fintech) startup companies to list shares on the bourse. There are many fintech startups around Asia striving to make a social impact. Especially in emerging markets such as Indonesia, some companies strive to do more than just turn a profit, and also aim to impact the population positively, increasing the number of financially included and making citizens more financially mobile through agile fintech services.


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