How New Technologies are Shaping the Future of FinTech in Asia?

FinTech Image Credit: pymnts.com
FinTech
Image Credit: pymnts.com

FinTech (Financial Technology) market in the Asia region is seeing a rapid growth

Fintech is emerging as the fastest growing industry to facilitate the smoother delivery and application of financial services to customers across both private and public banking using advanced technologies. In the Asia-Pacific (APAC) region, the sector is witnessing a rapid boom, as the financial sector in this area is significantly turning to new-age technologies and transparency driven by innovation and financial inclusion. 

Already, fintech has revolutionized people’s and businesses’ financial planning such as how they raise and transact money, and how they manage and plan their finances. Asia is leading the way into fintech adoption. According to an Ernst & Young survey, China and India are the leading countries in consumer adoption of financial technology products. More than 4 out of 5 respondents in China have used at least one financial technology service for mobile money transfer and payments, and over half reported using one for savings and investments. On the other side, in India, 47 percent of respondents said they have used a fintech insurance product.

With the growing proliferation of smartphones, financial technology systems are rapidly becoming a part of everyday life. Across key Asia-Pacific markets, consumer usage rates of FinTech-driven services have doubled in just two years. Countries including Hong Kong, Singapore, and South Korea have 67 percent adoption of financial technology services, while Australia stands at 58 percent. However, China is still equipping the largest share with 87 percent of penetration rates. In the region, fintech financing has more than doubled from US$5.2 billion to US$11.2 billion, contributing around 43 percent of the US$23.2 billion in global fintech investment.

 

Technology Innovation Influencing Asia’s FinTech Future

As most of the largest fintech firms are from Asia, the boom towards investment drives increasing market demand and faster adoption of technology. Financial technology has evolved as the most innovative and cost-effective technology that is redefining the financial services industry and enabling financial services providers to cater to evolving customer expectations of personalization and convenience.

Let’s have a look at how emerging technologies are revolutionizing the future of Asia’s fintech industry.

Blockchain

Blockchain promises a safe and secure way of transactions that cannot be tampered or changed. In a PwC report, around 77 percent of financial services providers globally expect to adopt blockchain by 2020. Blockchain in the fintech industry can deliver a more seamless and efficient banking experience to both banks and customers alike. It has the potential to assist in easing data breach and fraudulent activities by making all concerned parties aware of such activity in financial transactions. In Asia, blockchain startups can help drive crucial fintech growth. They may continue to find funding after financial technology investments surged to US$10.5 billion in the first nine months of 2016 from US$4.3 billion for all of 2015.

IoT

Using the internet of things (IoT) devices can transform how people make payments. Such devices like wearables can replace smartphones and traditional credit cards in making wireless payments and cash withdrawals. Wearable smart devices in the banking and financial services market have the ability to improve customer service and streamline daily functions. Citibank, for instance, has adopted Beacons allowing customers to use their smartphones to unlock doors at ATMs during off hours rather than using key cards. Across Asia markets, such smart devices saw a steep soar of US$35,756 million last year, at a CAGR of 15.9 percent. Comprehensively, the applications of IoT enable banks to boost overall efficiency using process automation.

Augmented Reality

The application of augmented reality (AR) continues flourishing across diverse industries, including FinTech. It assists traditional financial services providers and financial technology companies with overcoming their common challenges like scanning real estate objects automatically and offering mortgage calculations. AR has also the potential to offer various solutions in terms of customer service. Using this immersive tech, fintech can organize product demos and live conversations. As fintech companies are focusing on delivering enhanced customer experience, Belatrix Software developed an AR solution assisting users to locate nearest ATMs suing AR-based map.