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The digitization of financial services in Taiwan has dovetailed with rising online scams, but compared with many other economies, Taiwan did not experience a surge in such illicit activity for most of the pandemic. The reason is that Taiwan adhered to a de facto zero-Covid policy that kept infections down for more than two years. It was only in the past few months when the hyper-infectious omicron variant penetrated Taiwan’s defenses amid a wobbly global macroeconomic environment that online financial crime began to skyrocket.

Slowly but surely, peer-to-peer (P2P) lending is becoming a sustainable and regulated industry in Indonesia. A recent regulatory crackdown aimed at consolidating the sector into a smaller number of compliant, above-board firms has borne fruit. Unlike China, Indonesia has decided that P2P lending can serve a legitimate financial inclusion role. Having the benefit of hindsight, Jakarta moved to proactively regulate P2P lending.

Hong Kong’s virtual banks arrived at a tumultuous time in the city, facing the twin challenges of political tumult and Covid-19. However, the pandemic may have helped spur greater uptake of the online lenders’ services, especially now that Hong Kong has experienced a more severe Covid wave. Important questions remain though: How big is the opportunity in a city of 7. 4 million where 93% of people over 14 have a bank account? And is it realistic to assume that expansion to the mainland will be possible?

It is a testament to the difficulty of establishing a viable international financial center in Asia that so many first-tier cities in the region are vying to compete with Hong Kong yet none is truly a peer competitor. Even Singapore, undoubtedly the most important fintech hub in Southeast Asia if not the entire region, cannot match Hong Kong in the capital markets space. Seoul is the latest Asian city to throw its hat in the ring to become a global financial center.

On April 29, Bank Negara Malaysia (BNM) awarded digital banking licenses to five consortia primarily led by large tech firms and incumbent financial institutions. The one exception was a consortium that includes Grab and Singtel and is co-led by Kuok Brothers, a massive conglomerate that focuses on real estate, shipping and agribusiness, among other things.

Indonesia’s digibanking sector continues to be among the busiest in Asia Pacific with a flurry of deals in recent weeks. Key deals include buy now pay later (BNPL) firm FinAccel’s purchase of a majority stake in PT Bank Bisnis Internasional and SME financing platform Funding Societies and used car marketplace Carro investing an undisclosed amount in Bank Index Selindo (Bank Index). Indonesian peer-to-peer lender Amartha is also reportedly in talks to acquire 70% of local bank PT Bank Victoria Syariah.

We would say that the gravy train has been derailed for Australia’s cash-incinerating buy now, pay later (BNPL) firms, but they may not be exactly right. After all, “gravy train” implies making easy money and most of these companies never made money in the first place – if our key metric is profitability. The problems for these firms are manifest, from intense competition – and especially the arrival of deep-pocketed incumbents and tech firms to the market – to looming regulation and widening losses.

China’s fintech crackdown has slowed the domestic growth of the country’s biggest platform companies, but they remain committed to international expansion through strategic investments. Tencent has a number of key investments in Southeast Asia, Australia and UK that are worth watching, including its stakes in Sea Group, Voyager Innovations, Airwallex, Afterpay and most recently the UK fintech Previse.

One good unicorn deserves another. Just five months after the Philippines minted its first fintech unicorn – and indeed first private company to hit a US$1 billion valuation – it has produced another. While the first unicorn was Alibaba-backed Mynt, operator of the GCash e-wallet, the latest one is Tencent-backed Voyager Innovations, which operates the digital wallet PayMaya.

Digital banks tend to lose money in their early years of operation. It is usually not a question of if, but how much. In the case of Taiwan’s banks, the losses are sufficient to potentially require an increase in capitalization. Line Bank lost almost NT$2.3 billion (US$78.7 million) in about one year of operation while Rakuten Bank lost NT$705 million (US$24.1 million).

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