5 Factors Accelerating Growth of FinTechs in Asia In Asia, the speed of technology adoption is fast as there is no well-established legacyIn Asia, the speed of technology adoption is fast as there is no well-established legacy

By Evgeny Likhoded

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Pexels

The Asian market is extremely vibrant and attractive. High smartphone penetration and high internet speeds mean that barriers to operate and engage have been reduced. Most Asians are significantly financially literate. Disposable income is also rising across the region, which means more financial activity or the need to "bank" one's money and manage domestic and international transfers.

But why is Asian market so attractive to European FinTechs and RegTechs? Here are five driving forces affecting Asia's FinTech boom.

1. Specifics Of the Market

Asian market is truly unique. The degree of separation and difference between each market in Asia is much wider as opposed to countries in Europe. Each country is moving at its own pace. They all have a diverse set of needs that FinTechs can capitalize on. For example, microfinancing is much more popular in Indonesia than in Singapore where digital payments and its national QR-code initiative will aggregate all QR-code payments is in the works.

Most big banks in Singapore actually have operations across Asia. They have done expansions by acquiring local banks. Integration of local entities into a group is often not done perfectly. What RegTech can offer to banks in Asia is actually a way to manage their internal compliance in a central way and see where they have discrepancies with local processes with different countries in Asia, allowing them to make sure that they don't have inconsistencies.

2. Singapore Is in Transition Phase Regarding FinTech Regulations

Singapore is purely one of the most challenging countries in Asia in terms of regulations: it is a very well-developed market, but also a highly regulated market. Whereas regulations specifically for FinTechs are concerned, as Nik Storonsky, CEO and Founder of Revolut shared with us recently, Singapore is presently in a transition phase. Local regulators are in the process of consolidating the country's various rules and regulations relating to payments and stored value facilities, which may no longer be as relevant to the current market, into a new regulation - known as the Payment Services Bill. This situation gives a green light to RegTech firms offering innovative solutions for financial technology companies working in the region.

3. Monetary Authority of Singapore

MAS is a really powerful regulator. MAS itself is doing a lot, and it is following the FCA as well. They even provide funding to FinTechs and RegTechs. It collaborates very closely with the UK's FCA, which has been an example of how to lead innovation forward, how to provide a sandbox environment to the new entrants to the market. They are looking at how they can develop that market the fastest possible.

4. Speed of Technology Adoption

In Asia, the speed of technology adoption is fast as there is no well-established legacy. Thus, the market is developing at a quick pace. For RegTechs, it means that there is a potential to speed up the sales cycles and actually have faster adoption of the platforms within banks in Singapore and other countries.

The recipe for success is the type of services that you provide when it is very difficult for the competitors to provide the same. If that's the case, it means, success in the Asian market will be reached despite competition.

5. Openness

And last, but not least, the Asian market is definitely open to newcomers. If you have a presence in Singapore, people are very open to collaborating, working with companies from Europe. Because, when you open operations in Singapore, to local banks, it shows the commitment of that company to the local market. And also, in Hong Kong, there are lots of European companies. FinTech companies see Hong Kong as the doorway to China. It's a massive financial market as well. You can land in Hong Kong, and if you are able to show that you can sign clients there, it's a good sign that you will potentially be able to operate in China as well.

Wavy Line
Evgeny Likhoded

CEO and Founder, ClauseMatch

Evgeny Likhoded is the Founder and CEO of ClauseMatch, which helps financial institutions to implement robust governance and legal documentation processes as part of the first and second line of defence. Evgeny worked in the legal profession for several years in Morgan Stanley and Gazprom, Evgeny sought to improve the current ways of how legal and compliance departments manage high value and high-risk documentation.

Related Topics

Business Ideas

100 Businesses You Can Start With Less Than $100

There are many obstacles to starting your own business, but money isn't always one of them.

Starting a Business

5 Tips For Launching a Business While Keeping Your Day Job

Launching a business while holding down a 9-to-5 is no small feat. It's a common path for aspiring entrepreneurs, but it's not without its challenges.

Business News

The Virgin Islands Want to Serve Elon Musk a Subpoena, But They Can't Find Him

Government officials would like to talk to Tesla's owner as part of an investigation into the Jeffrey Epstein case.

Money & Finance

Want to Become a Millionaire? Follow Warren Buffett's 4 Rules.

Too many entrepreneurs are counting too heavily on a company exit for their eventual 'win.' Do this instead.

Franchise

The Hottest Industries Today

Our list of the franchises best positioned for growth, even in uncertain times.

Money & Finance

7 Ways to Make Extra Income Even With a Full-Time Job

Want to make more money? Real estate investing, Amazon ecommerce and the sharing economy are waiting for you.