In The Last Decade Fintech Provided Access To Banking For Millions Of Southeast Asians
September 3, 2021–Consumer and investor activity in e-commerce is disrupting the way transactions take place across the globe and reaching Southeast Asia’s massively underserved populations without access to formal banking or credit institutions.
As the pandemic evolves and economies reopen, the result is a boom in e-commerce investment in the area is booming. Meanwhile, it is further supported by local governments.
Today Southeast Asian economies are primed hotbeds for financial technology, also known as fintech, and investors are taking notice.
What Is Fintech?
Fintech is an emerging class of technology that supports banking and financial services. This ranges from cryptocurrency to e-wallets and everything in between. Moreover, it makes financial infrastructure more accessible for communities underserved by traditional finance.
As such, it is instrumental in expanding global financial inclusion as the operational costs of fintech are substantially lower than traditional finance. It’s a lot easier to give someone a phone than to build someone a bank.
In recent years, confidence in fintech has skyrocketed. Multiple companies such as Apple created their own e-wallet offerings. Google even offered users over $50 if they referred friends to its wallet. Additionally, China reversed its ban on cryptocurrency in 2017 and joined the fray only to clamp down more recently.
Financial Inclusion In Southeast Asia
Fintech ballooned into a multibillion-dollar industry in Asia in the last decade alone, bringing millions of Southeast Asians into the digital economy.
The companies driving the change are countless. GoTo brought Doordash-esque delivery services to Indonesia, making work more accessible without the need for brick-and-mortar offices. This year, the Philippines awarded Tonik and Unobank, two Singapore-based neobanks, awarded digital banking licenses. The companies are targeting the country’s severely underbanked population: 71 percent of the country’s 72 million adults lack access to banking services.
MoMo’s E-Wallet Market In Vietnam
In Vietnam, the digital banking unicorn (a startup worth over a $1 billion) MoMo strives to do the same thing. MoMo e-wallet provides digital banking services to underserved Vietnamese. At a recent conference, MoMo’s Founder and CEO Anthony Thomas said the product’s streamlined experience allows for a much more inclusive experience and helps everyday Vietnamese.
“Access to payments provides convenience,” he said. “But access to financial services is what improves lives.”
–MoMo CEO Anthony Thomas
Government Support for Fintech
Government support for fintech growth in Southeast Asia makes the region ripe for investment. China’s reversal on cryptocurrency in 2017 was an early indicator of the changing winds. Now, government agencies are making it easier for fintech startups to get past the red tape, which previously slowed their growth.
Singapore invested millions in deep-tech projects and advancing blockchain. Fintech licenses are being granted by governments at record numbers, with Indonesia clearing over 299 cryptocurrency assets for trading this year.
Government enthusiasm in the region for fintech is expected because the technology fuels the export-driven economies. As a result, the “Tiger Cub” Southeast Asian economies have grown during the pandemic.
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