Over the last few years, fintech startups in Southeast Asia have shown that they hold the key for the region’s population to achieve financial inclusion. According to a summary from Bain & Company, 70% of adult citizens were either underbanked or unbanked or had limited access to financial services. With the area’s tech transformation underway, digital banking and other online monetary solutions will help deliver revenues of about USD 38 billion and more in 2025.
McKinsey & Company defines financial inclusion as a situation whereby people can build wealth by accessing financial services such as savings, insurance, and loans, among others. David Brady, Sales Director SEA at Mambu, the SaaS cloud-native banking and financial services platform, said enabling everyone monetarily can “have a measurable and immediate effect on the socioeconomic status of communities and even entire nations”. He added that it creates jobs, sparks economic growth, increases the ability to send and receive money, and breaks the cycle of poverty to help consumers improve their personal situation.
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PricewaterhouseCoopers (PwC) gave an overview of the state of the financial technology sector in the Association of Southeast Asian Nations (ASEAN). Its report noted that the industry has had a journey of resilience and adaptability, with geopolitical and economic issues affecting funding. Early-stage fintech startups dominated investments, countries experienced shifting dynamics in funding shares, and the financial backing of fintech in regional economies dropped by less than 1% year-on-year (YoY) in 2024.
Furthermore, expectations are that fintechs will continue to grow as further innovation in generative artificial intelligence (GenAI), blockchain, and quantum computing takes root.
Notable impact of fintech on financial inclusivity
Despite the fintech ecosystem funding in ASEAN dropping by 23% in 2024, the sector has shown surges in segments like crypto and digital payments. Below are several ways in which the overall industry has had a substantial impact in bringing financial access to many Southeast Asians:
Rural and underserved communities
According to a report by Royal Park Partners (RPP), a world-class fintech advisory firm, there is a lack of financial services in society’s low-income segments because of non-digital distribution channels. The underdeveloped traditional financial structures in the rural areas create an unmet need for monetary services. Notable businesses like BillEase, Higala, and Wallex are bringing vital solutions to the fintech sector to serve communities.
ASEAN governments can meet these needs by investing in digitalising their economies and setting up the necessary infrastructure. They can improve connectivity gaps by installing 5G networks and setting up broadband services. Introducing fintech forces leaders and stakeholders to focus on providing literacy resources and training to enable citizens to embrace digital financial systems.
Mobile banking and eWallets
With online payments surging during the COVID-19 pandemic, mobile payment wallets also saw a surge in newly registered members. The PWC report noted that internet penetration in urban areas had increased by 70% in places like Singapore and Malaysia. The widespread use of smartphones and digital access makes transacting on various apps, gaming hubs, and cross-border eCommerce stores convenient.
The “super app” trend, where large companies like Grab offer multiple digital financial services, also opens doors for underserved areas. Residents can access banking, retail, wellness, insurance, wealth management, and other solutions needed in their communities.
Blockchain-powered lending
Digital assets and cryptocurrency have become some of Southeast Asia’s hallmarks of blockchain technology. Their expanding market, which is on target to reach USD 2.5 billion by 2028, is giving startups opportunities to provide innovative services to their customers. For example, Southeast Asians can earn money via crypto gaming or transacting NFTs (non-fungible assets) on various platforms.
Furthermore, blockchain technology is helping the lending sector by being a foundational part of developing the loaning systems and providing a secure, traceable, and auditable ledger of all transactions conducted.
AI-driven credit scoring
Artificial intelligence (AI) is making an impact in assessing the creditworthiness of Southeast Asians. There is a lot of data to analyse, such as payment history and borrowing status. AI can cut through the information to provide accurate credit scoring. An example is Nextbank, which has a 97% prediction accuracy rate for loan repayments.
Future trends in fintech in Southeast Asia
The future of fintech in Southeast Asia faces challenges in cybersecurity, with attacks becoming prevalent. Secondly, funding issues will continue due to geopolitical and global economic problems. Third, the region must address its regulatory constraints to prepare a path for seamless transactions, the shift toward embedded finance, digital banking, cross-border payments, and increased crypto adoption.
Ultimately, fintech startups in Southeast Asia can drive economic growth by increasing access to credit for SMEs, providing Buy Now Pay Later (BNPL) solutions to customers, and offering digital services that enable financial inclusion. Moving toward sustainable finance will attract green investment, push fintech innovation in climate change solutions such as carbon crediting platforms, and help the region address environmental concerns impacting residents.