Asia Marches On

A fortnight ago, we profiled China’s rise as a fintech hub, focusing on Ant Financial’s monster $14 billion funding round.

But progress doesn’t stop at China’s borders. It continues throughout Asia, with populations, wealth and connectivity growing, and centres of entrepreneurship springing up throughout the continent. Given the demographics, Asia may well come to dominate the future of fintech.

Today we’re assessing the key Asian fintech geographies and what their global impact could be.

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With a growing, un-banked middle class, India’s primary fintech focus is on currency and payments platforms, with progress promised by Prime Minister Modi to move the country away from coins and notes in an effort to boost economic efficiency and create tax transparency.

India is set up to create forward-thinking fintech giants. It has an engineering and technology pedigree, a large services-focused workforce and a young population that’s increasingly coming online. As in China, payments and personal banking technology dominate the sector, with the payments platform Paytm being first to go beyond a $10 billion valuation. Expect more to follow.


A traditional but tech-savvy society too, the biggest shift we’re seeing in Japan is one away from cash, with the government looking to move 40% of all cash to digital by 2027. We’re also seeing robo-advisors and low cost investment platforms cropping up, offering cheap alternatives to traditional money managers who have looked after Japanese savings.

Interestingly, in light of the European’s Open Banking legislation, Japan has implemented its own version, opening up bank APIs to fintech startups, who are free to use customer data to create innovative platforms and businesses. In 2 years, 12 banks have opened their systems. By 2020, 110 banks will follow. This makes efforts in Europe look somewhat trivial.

Hong Kong

Fintech growth and change in Hong Kong in the last year has been phenomenal. Thanks to its position as the gateway to China – and China’s opening up – Hong Kong finds itself ideally positioned to take advantage.

Investments in fintech more than doubled between 2016 to 2017, beating growth in Singapore and Australia, as the Hong Kong government and banking industry grow more comfortable with the fintech sector, keen to harness its potential. Online lending platform, WeLab, raised $220 million in November 2017, and many others are growing and seeking funding of similar volumes.


Singapore has always been at the forefront of financial innovation, but over the last year we’ve seen the opening of 3 fintech accelerators in the republic, which makes it one of the hottest spots for starting a fintech company in Asia, if not the world.

Given its position at the centre of so much traditional finance, especially in areas such as investment banking, FX and commodities trading, it’s well positioned to take advantage of emerging technologies, such as blockchain. Regulators in the region are working hard to make sure the environment is robust and open for fintech businesses in the region, too.

Emerging Asia

The likes of Malaysia, Vietnam, Thailand, and Indonesia, whilst known for their engineering and technological expertise, are beginning to offer consumer fintech solutions, too.

A recent report from Ernst & Young, found 87% of fintech firms across Southeast Asia planned to expand beyond current markets, providing reassurance that it isn’t just the traditional financial powerhouses leading the Asian charge.

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The increase in investment, awareness and confidence in the fintech sector in Asia is due to multiple factors. Primarily, investment is being driven by institutions who accept that outdated technologies need to be updated if Asian financial hubs are to keep pace with the West.

Further, demographics (younger, wealthier populations, a burgeoning middle class) are swelling a tech- and mobile-savvy generation, comfortable using phones for activities such as banking. Fintech has a once-in-a-generation opportunity to sell to more than 1 billion unbanked people. Satisfying them with technology is a win-win for consumers and financial services providers.

It’s also fair to say that there is a legacy in Asia where the public distrusts state-owned banking systems due to historical cases of corruption and extreme inefficiencies. Fintech offers an alternative. Until now, there has been none. Now there are many. Ant Financial is a prescient example. It offered a giant, unbanked population the opportunity to go straight to mobile banking operated by an independent provider. Its popularity, and the astronomical funding and valuations that follow, reflect both the good and the bad taking place in the region.

Big deals are being made, volumes are high, but fewer deals are being done. Transactions are concentrated. This may well mean that behemoths, backed by large corporations with cash, will succeed, whereas true startups will continue to find it hard to scale. The majority of Asian fintech investment continues to come out of China and India. Two deals, OneConnect (Shanghai) and WeCash (Beijing), accounted for 40% of the entire amount invested into Asian fintech in the last quarter of 2017. Awesome numbers. Highly concentrated.

This isn’t necessarily a bad thing – the market is big enough to go around – but we need to see ongoing disintermediation or the system will quickly resemble the financial model we’ve seen in Asia for the last 50 years, with a small number of dominant financial services companies.

However, undoubtedly, the future is bright, with some predicting that Asian fintech will race past US and European markets as populations and wealth grow. The pace of Asian fintech will only increase as the behemoths, like Ant Financial, Paytm and WeLab expand overseas.

On the flip side, with the Asian market growing more open and comfortable with financial technology, there are huge opportunities for European and US startups in Asia. Rest assured, the team at Origin are keeping a close eye on this exciting, vibrant and marching market.