Much like IoT, Asia and the Pacific represents the world’s biggest and arguably most important market for Fintech....
Fintech
Much like IoT, Asia and the Pacific represents the world’s biggest and arguably most important market for Fintech. The combination of large populations that remain underserved by traditional banking and financial services and massive mobile penetration has made Asia especially receptive to innovations such as mobile payments, banking apps, smartphone identification and authentication, and so on.
According to Frost & Sullivan, the Fintech market in the APAC region has been growing at a CAGR of 72.5% since 2015. Finance apps represent the most popular download category, with the first generation of mobile money and mobile payment apps now being supplemented with products for mobile insurance, smartphone-based credit scoring, third-party loans and much, much more.
The Fintech market in the APAC region has been growing at a CAGR of 72.5% since 2015.
Several Asian sub-regions and some of the larger domestic markets hold their ground as global Fintech hotspots in their own right. Southeast Asia, for example, is expected to see the economic value from Fintech reach anywhere between $70bn and $100bn by 2020. In China, where progress towards a cashless society is perhaps the fastest seen anywhere in the world, more than two thirds of adults say they regularly use Fintech services. India is not far behind, with half of consumers using alternative digital finance platforms through their mobile phones.
Value of fintech to reach anywhere between $70bn and $100bn by 2020 for Southeast Asia.
As Renatos Andrade Reis argues, Fintech carries one very obvious attraction to MVNOs and the rest of the mobile industry - lucrative revenue streams. With ARPUs as much as 100 times higher than mobile players can expect from voice and data services these days, Fintech represents an obvious extension to traditional mobile services that delivers genuine value. For a travel-focused MVNO, for example, developing an app for currency exchange and international payments is an obvious extension of their core service.
The same goes for MVNOs serving migrant worker communities that offer remittance platforms for sending money back home. When customers and/or their families often don’t have bank accounts, these apps are the ideal way for people to avoid the commission fees paid on international money wire transfers
As well as helping to drive increased revenues directly, Fintech applications also offer another potentially enormous source of value - data. The more transactions that are carried out via smartphones, the more data about how, where, when and why people spend their money there is flying around mobile networks. Fintech gives MVNOs a stake in and access to such data, which carries massive value to companies of all types.
Gary Bhomer commented: “Based on end users movements, usage patterns and behaviour, we can gather insights that drive highly effective marketing and targeting based on user profiles, so we can deliver relevant messages at times people are most likely to take notice or action. There is no Personal Identifiable information used, so this does not impact GDPR-like legislation.
“MVNOs that capture this information and are in a position to effectively monetise it will be in a much stronger position than those that don’t. There are already a number of companies capturing this data and a number of players taking a position in this space like Singtel’s Amobee and Telstra’s investment in Near.”
