2016 was a record-breaking year for the Asian continent in terms of VC investment in fintech and general growth of the industry. With a well-developed tech sector and a large financially underserved population, countries such as China and India are ideal markets for fintech.
So far, the development of the Asian fintech scene has been mainly driven by payments, peer-to-peer or marketplace lending, and comparison sites. Indeed, the adoption rate of mobile forms of payments and online services is increasing much faster than in Europe or the US with some Chinese merchants even refusing cash. India’s government has also been giving great support to fintech, building a common payments platform in an effort to create a more transparent and inclusive ecosystem.
Following Singapore’s example, countries such as Hong Kong and Australia have equally been encouraging financial innovation, especially for banking, by creating regulatory sandboxes. Most recently the areas of insurtech and regtech have been gaining more traction with the attractive promise to reduce bureaucratic hurdles through automation.
Another defining trend shaping the Asian markets is the recent creation of cross-border consortiums to develop distributed ledgers and blockchain solutions. This new form of collaboration is foreseen to greatly facilitate and accelerate the modernisation of finance throughout the continent.
Furthermore, this wave of innovation is not likely to stop at the Oriental borders. In fact, products such as Tencent’s WeChat wallet and Ant Financial’s Alipay are already gaining terrain in Africa, Europe and the US. The Silicon Valley and the Silicon Roundabout could soon be overtaken by the rise of Asian fintech.