With the rapid development of the FinTech, there has been a surge of digital-first financial products and services. Consumer adoption rates of FinTech-powered services have doubled, and in some cases tripled, across key Asia-Pacific markets. Hong Kong, Singapore, and South Korea have 67% FinTech adoption, while Australia now stands at 58%. Mainland China keeps its leads in FinTech innovation with 87% penetration.i
Explore the key FinTech trends in Asia and learn how they could transform the financial services market and shape consumer adoption of digital transactions in 2022 and beyond.
Rise of Neobanks
By 2025, 65% of banking customers in Asia-Pacific are likely to use some digital banking services offered by the neobanks.ii Neobanks are mobile-native alternatives to traditional branch-based banks. 97% of APAC consumers either consider the digital channel the best of several ways to interact with their bank or use it as one of several channels in a multichannel or omnichannel offering.iii According to a recent survey, Hong Kong has the third-highest neobanks adoption rate globally, with 14% of consumers saying they have a primary financial relationship (PFR) with neobanks.iv
Rise of Buy Now Pay Later (BNPL) Transactions
Buy now, pay later (BNPL) transactions has started to emerge as the best credit option among e-commerce purchases in APAC as it provides consumers with the flexibility to pay for purchases on later dates. BNPL is a booming market that’s set to grow from US$7.3 billion in 2019 to US$33.6 billion in 2027 at a compound annual growth rate (CAGR) of 21.2%.v FinTech companies are seizing the opportunity to implement BNPL solutions, replacing traditional financing options with more convenient and alternative payment platforms.
Emergence of Financial SuperApps
“SuperApps” are the next generation of mobile app platforms that offer a range of features and convenient solutions driving high user engagement across large audiences. This ecosystem application is driving growth in the FinTech industry, addressing the growing demands for an “all-in-one” financial app. Subsequently, SuperApps benefit from impressive user data, providing the ability to cross sell, upsell and lower acquisition cost of customers.vi The key to SuperApps success is a super mobile wallet, acting as the launchpad for other financial services such as loans, insurance, investing, and digital banking.
AI-driven Financial Services
60% of banks in Asia Pacific will leverage AI or machine learning (ML) technologies for data-driven decisions.vii This empowers banks to provide personalised offerings to customers based on their financial behaviour and services being used. In addition, AI and ML empower banks on fraud detection, lending approvals, eKYC processing, risk monitoring and investment proposals. These intelligent value-added services provide customers with better usage, security and overall enhanced experience.
Growth of Open Banking
The reliance on digital payments and self-service banking has become even more evident during the pandemic, providing the need for banks to become more digital. Open banking has been successful due to open APIs, FinTech ecosystems, and adoption of new technologies, enabling banks and other providers to seamlessly deliver financial services using authenticated and shared customer data. The open banking market is expected to balloon to US$43.2 billion by 2026 at a CAGR of 24.4%.viii
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