The paramountcy of the SWIFT interbank messaging network to cross-border payments can be measured in many ways, and SWIFT itself likes to do so with its data on transaction numbers and amounts. For instance, as of December 2022, Swift had recorded an average of 44.8 million FIN messages (payments and securities transactions) per day during the year, a year on year rise of 6.6%.

Across Asia’s emerging markets, earned wage access (EWA) has been gaining traction rapidly in the past two years. In a nutshell, EWA platforms allow employees of a company to access a portion of their earned pay before payday. EWA is catching on fast in some of Southeast Asia’s largest emerging markets where per-capita GDP remains relatively low and significant portions of the population are either unbanked or underbanked.

How many platform companies outside of China have been able to make the super app concept work? Last time we checked, the only profitable one with a thriving fintech unit is Korea’s Kakao, and the jury is still out on that company. Unlike Korea or China though, Southeast Asia is an extremely heterogenous market – if we can even call a region with 11 countries that speak many different languages a single “market” – which means that a one-size-fits-all super app was never going to be an easy sell. On top of that, Southeast Asia’s consumers have limited spending power while competition in digital services is intense. Grab’s first-quarter performance highlights the challenge platform companies in the region face.

This commentary was written in collaboration with Banking Circle. 

The majority of cross-border payments are currently carried out via telegraphic transfers supported by SWIFT’s network of correspondent banks. These transfers are often criticized for being slow and expensive. A transfer can take several days to complete, while the World Bank estimates the average cost of a transaction to be about 6% of the transfer value.

In East Asia, digital banks often are incumbent banks and tech giants in disguise, not so much disrupting the market as putting a new spin on an old story. There are exceptions though, and the Philippines is arguably the most prominent. A unique confluence of factors, from its unique island geography (it has about 2,000 inhabited islands) to complacent incumbents to a significant unbanked population to a central government plan that relies on digital finance to rapidly boost financial inclusion, has given online lenders a real chance to shake up the market and challenge incumbent lenders.

In its competition with Hong Kong to be Asia’s top fintech hub, it is pretty clear Singapore has won. Its linkages to Southeast Asia and India – where the fintech growth story is – are superior, while Hong Kong is more narrowly focused on mainland China, where fintech peaked a while back. Singapore also weathered the pandemic better. That said, Hong Kong is emerging as a strong player in green finance, with some analysts giving it the edge over Singapore.

Since China unveiled the digital renminbi several years ago, it has been hyped as a juggernaut that would dethrone the dollar in the international financial system while relegating China’s domestic e-payments duopoly of Alipay and Tenpay to supporting roles. The digital yuan’s biggest boosters – usually not Chinese policymakers – made such predictions without offering compelling evidence to support their arguments.

It’s all about financial inclusion: That’s why buy now, pay later (BNPL) is continuing to grow briskly in Indonesia, why regulators are maintaining a light touch, why venture capitalists and others keep pouring money into the country’s BNPL firms. Indonesia has an unbanked population of 181 million that is larger than the populations of most countries and many more underbanked people. Interest-free (if you pay on time) installment payments seamlessly integrated into e-wallets could become a dominant form of de facto credit in the country.

2022 is a tough act to follow for China’s IPO market. Last year, about 400 firms went public on China’s exchanges, raising a record RMB 560 billion (US$80.4 billion), an increase of 3% over 2021, according to PwC. Investor appetite was strong last year amid a resilient Chinese economy, tech firms continuing to emerge, and large red-chip companies listed overseas returning to mainland stock markets. While Chinese exchanges are unlikely to equal their stellar 2022 performance this year, they still have thus far raised five times as much as their U.S. counterparts.

Singapore has long competed with Hong Kong in asset management. While the latter’s industry is still larger, the city-state’s has been growing expeditiously, buoyed by an influx of capital from China as well as the broader global super rich. Singapore's assets under management grew 16% to S$5.4 trillion (US$404.6 billion) in 2021. More than 75% of that originated outside Singapore, with about 30% coming from other Asia-Pacific countries.