There’s a revolution going on in financial services. In fact, the industry is going through its most profound transformation in history.
What’s driving this sector-wide evolution? Fintech, which is the use of technology to deliver financial services to consumers, is redefining and reshaping the sector in fundamental ways, and its growth is being fueled by significant and increasing amounts of investment.
Asia is leading the way in the mass adoption of fintech tools such as investment, banking and savings apps, according to all the available research.
The recent EY survey of more than 27,000 people across the region revealed that pick-up of financial technology has “skyrocketed among consumers and small businesses, particularly in China, India and the financial hubs.”
All over Asia, adoption is taking place at a faster rate than elsewhere in the world as fintech becomes an integral part of everyday life. Usage rates have doubled, and in some cases tripled, across key Asia-Pacific markets, says the latest EY research.
Hong Kong, Singapore and South Korea have 67% fintech adoption. For now, most markets are still well below China’s 87%, except for India, which is “now nearly tied with Asia’s leading digital power.”
It’s my belief that while other regions will speed up in terms of fintech adoption, Asia will retain its leadership position for the foreseeable future for three key reasons.
First, pro-business deregulation. Asian financial markets are already relatively deregulated compared with Western ones, and this is a trend that is likely to increase in coming years. This will help emerging brands grow and existing ones develop at a higher speed thanks to there being more flexibility, confidence, investment opportunities and licenses granted to startups in the fintech ecosystem.
Second, competition. The rapidly growing sector will lure in more companies eager for a slice of the fintech action (and profits). This loop will foster robust competition and further spur on investment and critical innovation.
Third, e-commerce giants. The likes of tech monoliths such as Alibaba and Tencent already play a major part in people’s lives in Asia, especially in China. These firms are already moving into fintech, unlike their counterparts in North America and Europe, which are sluggishly still considering it.
I am confident these two factors put Asia light-years ahead of the rest of the world.
As a longtime advocate of fintech, I’m firmly of the opinion that fintech advancement is a positive force.
It’s good for clients who increasingly want all their financial-services needs to be dealt with on demand, online and/or on their mobile devices.
It’s good for society, as it’s speeding up the advance of financial inclusion. It is providing access to financial services for millions of people who live in remote areas or might normally not be able to use financial services because of the biases of traditional financial firms.
Fintech is helping to create a better, more connected world in which more people than ever before will be able to reach their financial goals.
And it’s likely this will be felt more explicitly in Asia than anywhere else.
Nigel Green is CEO and founder of deVere Group.