by Asia Perspective

The best market for FinTech right now is Southeast Asia

July 16, 2019

According to a study about FinTech companies, the ASEAN market is representing the greatest opportunities for FinTech development in the nearest future. The report made by Deloitte and Robocash, in which more than 60 private FinTech firms were surveyed, states that Fintech investments in Southeast Asia in 2018 have exceeded the US$5.7 billion investments in 2017 by up to 20-30%.

Paying for goods with a mobile phone

Looking at the Southeast Asian market we have been seeing some successful ride-hailing startups, digital payment startups and some money remittance startups over the last couple of years. Right now, you could say that all eyes are on Southeast Asia and all the FinTech developments going on over here.

The most promising areas in FinTech right now are the online lenders and FinTech firms that facilitate access to credit.

What contributed to this continued growth is the insufficient financial inclusion that has opened up these opportunities for the entire FinTech industry. And the robust growth in the ASEAN market is set to continue as the FinTech market is expected to grow at CAGR of 72.5% from 2015 to 2020, reaching US$72 billion by 2020, according to Frost & Sullivan’s annual Fintech Outlook.

The Southeast Asian region has around 266 million people living there, with limited access to basic financial services. There are also over 30 million small-to-medium sized enterprises underserved by the financial system in this region, together facing a collective credit shortfall of around US$175 billion.

We can safely say that the potential market for FinTech in the ASEAN region is significant.

Distribution of Fintech Companies in ASEAN

Looking at the Southeast Asian market we have been seeing some successful ride-hailing startups, digital payment startups and some money remittance startups over the last couple of years. Right now, you could say that all eyes are on Southeast Asia and all the FinTech developments going on over here.

Southeast Asia´s Internet Economy Market Size

Mobile Payment

What contributed to the success of Mobile Payment startups in this region is mainly due to two factors, huge population with no access to basic financial services and the rise of mobile payment usage. The region is home to over 350 million daily internet users, with 90% of them using their mobile phones. With this kind of gap to financial services, there has become a significant demand for mobile payment apps and mobile banking.

Money Remittance

Along with mobile payment, the people in Southeast Asia are also using services for money remittance in a quite wide extent. The market in Southeast Asia for money remittance services is booming right now.

According to a recent study, the remittance market in ASEAN region were valued at US$70 billion in 2017, and have since kept growing. Contributing to this growing market are a large group of migrant workers in countries like Indonesia, Vietnam and the Philippines, who are looking for an easy low-cost remittance service.

Ride Hailing

Looking at the ride hailing market it has become one of the most successful markets in Southeast Asia and has grown four-fold since 2015 and will be a US$20.1 billion market by 2025.

There are over 35 million Southeast Asians using ride hailing services every month and 9 million daily rides across 500 cities. The top players in these markets are GO-JEK, Uber and Grab, who are all contributing to the economies by creating full-time jobs within these markets. In 2017 these three players engaged more than 2.5 million SEA drivers.

As more and more sectors of Southeast Asia’s economy are transformed by the internet, the opportunities for tech startups to deliver the enabling digital financial services will multiply. We are now seeing a large number of firms investing in startups in the region or launching FinTech incentives to tap into this growing market.

Looking forward, we expect to see continued growth in the FinTech funding, both in terms of size and deal numbers in the ASEAN region.


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