Asia has led the way in financial technology since it significantly began reshaping the way financial services are delivered to consumers, but it must work harder to maintain its dominance.
Most traditional financial-services firms were monumentally caught off guard by the 2007-2008 crash. As they went into survival mode and regrouped, fintech providers started to move in and are filling the void left between what traditional financial-services companies are offering and what customers are now expecting, especially in terms of customer experience.
Fintech is already the new normal as we increasingly insist on immediate, on-the-go, 24/7 access to, use and management of our money. We demand personalized, on-demand services and lower costs.
Asia continues to be at the heart of the fintech revolution.
We attribute this to several key factors. These include a proactive approach to innovation by regulators; the plethora of virtual banks; the development of the wider tech ecosystem, especially application programming interfaces (API); and the influx of Chinese financial and tech giants into the sector.
The sector has incalculable benefits for Asian economies. It can boost wider innovation and competition across the economy, while managing the risks.
It can also broaden regulatory supervision to enable authorities to foster a safe, efficient, and inclusive financial system, which will help shore up the economy.
In addition, it can help proactively shape markets to encourage modernization, competition and productivity within the financial-services sector.
Plus, it can help bridge the gap between public and private sectors, which will create a more agile economy and help strong cross-border coordination and sharing of information and best practices.
For these reasons, among others, such as societal ones, Asia needs to up its game in remaining at the forefront. This is because as the advantages of early moves and adoption fade, slower-moving markets, such as those in the West, will see the huge advantages of what has been happening in Asia, build on the developments and find dynamic ways to catch up.
To some degree, that is already happening.
Without strong finances and a strong financial sector, a country and/or region has limited influence. As the future of finance is technology, fintech will determine the powerhouse economies of the next decade.
It is in Asia’s hands to remain dominant in fintech.
Nigel Green is founder and CEO of deVere Group. Follow him on Twitter @nigeljgreen.