Opinion: Asia could be the next global fintech leader, but a lot can go wrong

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At the beginning of every year, EconomyUp (an Italian economic magazine) invites me to provide 10 forecasts for the fintech industry. This time, one of my most controversial projections was about Asia’s leading role.

I bet that many readers were expecting praise for London—where I live—and some readers would love to challenge London in favor of Dublin, Frankfurt, or Milan. While I do still believe that London will not lose its role as a fintech capital, I am definitively confident about one thing: Asia will become an amazing place to work in fintech. In fact, it already is.

There are two main reasons why Asia could become the new global fintech leader.

1. A population open to new technologies

Sixty percent of the world’s population lives in Asia, and they are open to test new technologies.

In 2016, Indian Prime Minister Narendra Modi announced the abolition of 500 and 1,000 rupees banknotes. International media made a big fuss about whether Modi was a bold genius or an irresponsible politician, but they missed one of the main consequences.

After the Prime Minister’s decision, Paytm (a payment startup) acquired 20 million customers in 40 days. Other fintech startups had similar achievements.

In Europe and the US, these numbers simply do not exist. No Western company—not even the PayPal of the golden days—has ever acquired so many customers in such a small amount of time.

2. Unbanked customers

The second reason is the high number of people who do not have a bank account or a credit card.

Asia benefits from the classic leapfrog economy (when a smart but less developed market gets in touch with the global economy, it advances fast by skipping the intermediate steps).

In Europe, it took many generations to move from paper checks, credit cards, to a timid use of smartphone payments. Credit cards already provide a convenient tool of payment, and European consumers do not feel the need to learn new apps.

This is not the case in Asia. Three billion people do not have a bank account or a credit card. Still, many of them have a mobile phone. The majority of the unbanked is concentrated in Asia and Africa, and they are open to use new fintech technologies.

The not-so-obvious benefits of fintech

Some benefits of fintech are quite obvious. Payment apps empower every person to open a shop without dealing with cash (reducing the risk of a robbery), allow workers to send money to their families, and so on.

There is a less obvious benefit, and it’s truly revolutionary. Fintech apps may empower every person to ask or give a loan to their neighbor directly without the need for a bank.

What can possibly go wrong for Asia?

A new prediction for the next year(s)