What’s next for the fintech developments in Asia Pacific

Fintech has brought about rapid development and innovations in payments, financing and currency exchange globally in recent years. Banks and financial institutions across the world are more challenged than ever to provide consumers with personalised and intuitive products and services that transform how they think about traditional banking.

Based on Citi’s internal data, over 50% of its Asia Pacific customers are actively using digital banking channels and over 20 million digital banking transactions are now completed monthly. As many as 20% of Citi’s customers in Australia and Singapore have applied for credit cards online, with over half who have opted to receive electronic banking statements. In addition, as mobile penetration becomes more prevalent, people are using their smartphones for practically everything – from messaging to banking. This change in lifestyle preference for ease, efficiency and speed is the reason why banks are now increasingly looking to fintech to address this need.

In Asia, fintech has seen exciting developments within the evolving startup tech community and ecosystem. Accelerators such as Startupbootcamp and JFDI in Singapore and AcceleratorHK and NestVC in Hong Kong have brought developers and investors closer. For Singapore, the country has already established itself as one of Asia’s premier financial hub and is an attractive destination for fintech developers as a result of the strong support from the local government and its agencies.

Some of the Singapore government’s initiatives include The Smart Nation Programme, launched by the Prime Minister of Singapore Mr Lee Hsien Loong in 2014, that seeks to embrace innovation and harness ICT by bringing together stakeholders from the Government and the industry to identify issues and develop solutions to increase productivity and improve the welfare of Singaporeans, and the new Financial Sector Technology and Innovation (FSTI) scheme that was introduced by the Monetary Authority of Singapore (MAS) in June 2015. The MAS has committed to investing S$225 million over the next five years to fund the establishment of innovation labs, institutional-level projects and industry-wide initiatives.

In a report titled ‘The Future of Financial Services’ from the World Economic Forum, it was found that global investments amounting to US$12.2 billion in 2014 were in the fintech sector,  more than a threefold increase compared to 2013. Customer expectations and lack of trust were cited as key challenges to the existing structure of the industry, particularly following the global financial crisis in 2008.

For a startup or Fintech developer however, navigating through legal and compliance requirements, ensuring development updates go through without a hitch, networking with industry leaders and sourcing for funding are some of the common issues that they are likely to encounter, and may not necessarily have the expertise or resources to resolve. This is why working with global banks will greatly benefit as not only will the startup or developer be able to leverage on the global banks’ vast network, they will also be able to take advantage of the mentorship that comes along with the collaboration to realise their dreams and bring their solutions to the global stage.

Shameless plug from me, but Citi Mobile Challenge is one of our efforts to support developers and startups in Asia in fintech. Registration ends tomorrow, and you stand to win a share of US$100,000 in awards. It’s our belief that more projects like this need to support fintech in order for the wave to continue. And we’d love to see more companies jump on the wagon and support the effort. Asia’s fintech potential is still on its way up, the numbers say it all.