Southeast Asia is currently a hotspot for just about every form of development. This is no more evident than in the technological sector. Fueled by government initiatives, investments from giant corporations and venture capitalists worldwide, leaps and bounds are being made toward the implementation of advanced tech systems. One of the current primary trends for investment and development is the FinTech sector.
A Deloitte report published at the end of 2018 looked into the state of FinTech investments in Southeast Asian countries. The report found that investments in 2018 were up by 30% when contrasted with the previous year’s $5.7 billion USD. This runs parallel with Google’s e-Conomy SEA report, which stated that the Internet economy of Southeast Asia is anticipated to have increased by 44% in the same period of time. This level of exponential growth and subsequent investment is expected to lead the Southeast Asian FinTech market to an estimated value of $72 billion USD by 2020.
We look at emerging Fintech trends in Southeast Asia
In a region of the world where 73% of the population does not have a bank account–equating to around 438 million people–and 82% of customers are willing to use FinTech products as an alternative, the market is ripe for the taking for FinTech developments. This both explains and justifies the huge projections for the industry in Southeast Asia.
Invariably, with growth come re-investment and better developments. FinTech-based startups in Southeast Asia are now looking to make a change, and by producing debt management services can help users capitalise on the newfound technological advancements. These services have been created in an effort to cut out the middle-man, so to speak, by providing an online platform from which a user is given access to debt management professionals and counseling services. This removes the necessity and difficulty in some Southeast Asian countries to make appointments and travel to city centres to see a traditional debt management firm, while simultaneously reducing the cost of the assistance.
Looking at Singapore
Credit Culture is the first FinTech company in Singapore to become a licensee, courtesy of the Ministry of Law, purely from a concept and pilot copy of their blueprint. As is evident from the title of the company, Credit Culture is looking to address the growing habit of lending in Singapore by launching its own money lending platform.
Credit Culture’s goal is simple: to lower the cost of credit and drive financial inclusion across the wide spectrum of income bands, while also extending the opportunity to access credit for the lower income sector of Singaporean society who currently do not have access to banking facilities.
The company provides digital solutions which are used to address the current market inefficiencies, cutting out the need for face-to-face meetings, and allowing Singaporeans to access credit swiftly, at a low price, and with an easier application process.
Indonesia disrupts Malaysia
Malaysia holds the second position, behind Indonesia, in the Southeast Asian rankings for overdue consumer loans, with an estimated $15 billion USD looming over the debtors–signalling the country’s desperation for debt management services to combat the mounting numbers. For this reason, Amalan International, an Indonesian “online distressed solutions” startup has expanded its reach to the Malaysian markets. Amalan serves people who are struggling to repay their loans. On the relatively common occurrence that the traditional method of money collection fails, lenders choose to either write off the debt or they negotiate with the debtor in an attempt to recoup part of the money that they are owed on the precipice of losing.
Generally speaking, collection agencies, banks, and online lenders only have access to the data between themselves and their clients; they are unable to see the whole picture and are unaware of any other outgoings that a debtor may have. In an effort to bring transparency and fairness to the traditional structures, Amalan provides a system that positions them as the acting mediator between the two parties involved. Amalan’s FinTech software generates a restructuring plan after evaluating the entire financial situation of a debtor. Once evaluated, the payment plan restructures the debt balance and makes the debtors’ monthly repayments realistic and affordable.
Why is Asia leading the global Fintech race?
In a world where technological advancements occur on an almost daily basis, Southeast Asia is fast becoming a contender for the technological hub of the world, with Singapore leading the charge. For financial technology specifically, Southeast Asia is on the road to becoming both a regional and global powerhouse, working as a leader in industry innovation with a willing consumer base and attracting billions of dollars worth of investment. Technological innovation in this region of the world is exponential, with the consumer marketplace for tech and the demand for tech-based solutions constantly growing. Western organisations and investment firms are looking to capitalise on these developments, using Singapore as a springboard to propel them into the booming Southeast Asian market.