The fintech sector in Asia Pacific is booming, according to Accenture's 'Fintech and the evolving landscape' report.
The study found that fintech investment in the region more than quadrupled to US$4.3 billion in 2015, which accounts for 19 percent of global financial activity. Payments is the most popular segment for fintech deals in Asia Pacific, accounting for 38 percent of the total investments.
While China has the lion's share of investment, accounting for 45 percent in 2015, fintech is also taking off in ASEAN.
For instance, Singapore-based Marvelstone Tech, which bills itself as a facilitator of fintech, announced in February it raised S$17.7 million (US$12.6 million) seed round from angel investors. The company says the main goal of the platform is to fund small and medium-sized enterprises (SMEs) in Korea with data-driven analytics.
In the same month, Singapore-based Jewel Paymentech - which offers risk management solutions that perform automated and predictive due diligence, and 'know-your-customer' processes on merchants - said it secured over S$1.5 million (US$1 million) in Series A funding.
Meanwhile, Malaysian's MoneyMatch secured US$150,000 seed funding to roll out their currency exchange platform that focuses on community building among consumers. The exchange aims to match those who want to change one currency in exchange for another currency, without needing an intermediary.
Given the rise of fintech, Accenture predicts three scenarios (related to banks) to likely emerge:
- Banks to retain relevance to their customers by adopting fintech much more aggressively, enabling great productivity improvements, which could be passed on to customers through lower transaction fees;
- Banks to become less directly relevant to customers but retain end-to-end platform service provision by creating value-added, open, secure, and resilient services that can also be integrated with other customer solutions;
- Banks to lose their customer-facing relevance and their industry foothold as more nimble tech/processing companies create better platforms. However, banks will retain a core role as highly regulated entities that integrate complex supply chains of platform providers.
"Banks must learn how to reach, interact with and delight their customers. By forming partnerships with [fintech] firms, they can access their deep pools of customer data and drive future products and services. If banks surrender parts of their supply chain that they possess neither the appetite nor the capability to run efficiently, they could concentrate instead on driving higher returns from other, more valuable parts of their business," said Accenture.
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