The ecosystem of global fintech continues to grow actively, from blockchain technology to mobile wallets, as the capital market has poured huge investments into the fintech startup sector. While most fintech entrepreneurs are dominated by western countries historically, Asia’s fintech landscape is developing differently in last five years by four factors.
- Geographic Fragmentation.
Countries with small market need to obtain license to do business in diverse foreign markets.
- Growing Consumer Class.
The middle consumer class is growing and E-commerce retailers is guiding customers to go cashless.
- Unbanked Populations.
50% of the un-banked are in Asia. Cash payment is still common in used because of not having enough money to deposit after living consumption, high flexibility to use in rural areas, and lack of trust in banks.
- Mobile penetration.
The mobile phone penetration rate in India has reached to 80% and 99% in Indonesia. However, consumer credit reference is still relatively new to the financial markets in Asia. Data is recorded on the mobile devices, but how to utilize existing data to predict creditworthiness is an opportunity and challenge for fintech companies.
Source:
http://www.forbes.com/sites/falgunidesai/2016/04/29/asias-fintech-potential/#3fd37b7d72a3
Interesting article. It is true that Asia has a completely different financial world picture from the western countries due to cultural difference and history background. It’s gonna be harder to implement FinTech in those areas where the main payment method is cash and are lack of credit system.
This is a very helpful article. Definitely due to the differences of historical development, tradition of using cash and lack of complete consumers’ credit history database, the models of fintech in western countries are not appropriate to be completely applied in Asian countries.