Latest Insight
- The light is flashing yellow for crypto in Singapore
- Assessing the impact on Asia of the SVB and Signature Banks collapses
- In Conversation with... CEO Henry and CCO Michael, UnionDigital Bank
- Siam Commercial Bank pivots to digital banking
- How did Cambodia get removed from the FATF grey list?
- The role of fintech in growth markets
- Fintech sector in Indonesia is down but not out
- Airwallex is set for expansion in China
- Sea gets a taste of profitability
- Hong Kong tries to recover its global financial center mojo
Latest Reports
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2023 Top 10 Asia Pacific FinTech Trends
As we start 2023, the global market faces a period of great geopolitical and macroeconomic uncertainty. Although there are signs that inflation might be under control and Europe has largely weathered the winter unscathed, many economists see more turbulent times ahead. The De-Risking Threat to Asia Pacific Fintechs - A Report from Kapronasia in Collaboration with Banking Circle
In recent years, banks in the Asia-Pacific (APAC) region have faced rising regulatory scrutiny amid a global fight against money laundering and other financial crime. Banks have been rocked by the massive 1MDB scandal, implicated in the FinCEN papers and are wary of being exposed to the cryptocurrency industry, which… Unpacking the Potential of Embedded Finance in Asia - A Research Brief from Kapronasia in Collaboration with Thought Machine
The inexorable march of new technology in everyday life is heavily impacting the nature of financial services in Asia. One area of particular interest is the degree to which financial services are increasingly being provided via non-financial platforms or apps – embedded finance.
With 37 retail banks for a population of 23.5 million, Taiwan is not the easiest market for digital banks to crack. Just about every Taiwanese adult has a bank account; in fact, many have more than one because of the tendency of companies in Taiwan to require employees to open a bank account with the company bank. Nevertheless, near ubiquitous smartphone penetration and the popularity of certain platform companies’ ecosystems offer digital banks an opening in Taiwan, especially given the effect of the pandemic on people’s banking habits.
The super app trio of Grab, GoTo and Sea is growing increasingly dominant in Southeast Asia, but not yet in Vietnam. In fact, it is the homegrown MoMo which leads Vietnam’s e-payments market. MoMo says it has a 60% market share and processes US$14 million annually for 25 million users.
We have to hand it to AirAsia: They tell the super app story well, probably better than some of the others whose task is less daunting than the beleaguered airline’s. Indeed, AirAsia is not a high-flying tech company aiming to use fintech to take its valuation and exit to the next level, but an airline facing an existential crisis wrought by the never-ending coronavirus pandemic. If AirAsia pulls off its transformation, it will stand as one of the great turnarounds in recent Asian corporate history, and perhaps pave the way for a new breed of platform company.
Not every tech company is cut out to be a fintech. Even the super apps that have bet everything on a fintech transformation will agree with that statement: They just will insist their particular business model is a winner. Not gaming hardware maker Razer though. The Hong Kong-listed firm is the latest non-financial company to have second thoughts about a fintech foray, pulling the plug on its Razer Pay e-wallet and card after failing to win a digital bank license in Singapore.
Revolut is the biggest neobank most of Asia has never heard of. Try as it might, Revolut just has not been able to make much of an impact in any APAC market yet, which is not a huge surprise given the amount of competition it faces and its distant home base in the UK. Revolut needs something to make it stand out from the crowd in APAC. Its new travel app Stays might be just what the doctor ordered.
It would have been difficult for Singapore’s Big 3 banks – DBS, OCBC and UOB – to beat their performance in the first quarter. That holds especially true for DBS and OCBC, which both posted record earnings in the January-March period. So while all three banks saw earnings fall in the second quarter on a quarterly basis, they still turned in a solid performance that beat analysts’ expectations.
Move over Grab and GoTo: There is a new Southeast Asian unicorn in town. The rapid ascendancy of Singapore-based payments startup Nium, which reached a US$1 billion valuation following a Series D round that raised more than US$200 million, shows that there is more to Southeast Asian tech than consumer-oriented super apps.
Just when buy now, pay later (BNPL) had seemingly reached an apex in Australia, Jack Dorsey’s Square buys Afterpay for US$29 billion, the largest M&A deal in Australian history. Anyone who thought Afterpay would be easily surpassed by deep-pocketed global payments giants like PayPal or Australia’s own banking heavyweights will have to think again.
Indonesia is fast becoming the most hotly contested of Southeast Asia’s digital services markets. No other market is both as large and untapped. With that in mind, Singapore’s Sea Group and hometown favorite GoTo have made significant plays in recent months. The former acquired Bank BKE, while Gojek upped its stake in Bank Jago and then merged with Tokopedia. Not to be outdone, Grab is teaming up with Tokopedia's rival Bukalapak. This move finally brings e-commerce into the Singaporean firm's ecosystem and strengthens the hands of both Grab and Bukalapak as they prepare to go public.
Big Tech increasly has its eyes on Asia-Pacific’s growing fintech market. Yet most of the US tech giants are off to a late start in the region. Although it has been present in numerous APAC markets for years, PayPal is not really an exception to the rule. The U.S. payments giant has historically focused on North America and to a lesser extent Europe, with only a minor footprint in APAC. That is changing now that PayPal has super app ambitions and sees new opportunities in China, Southeast Asia and Australia.
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If you can’t beat ‘em, join ‘em. That seems to be true in just about every market that has introduced digital banks, and it is a two-way street. Hype about the challengers unseating incumbents tends to give way to a more nuanced reality in which there is some room for cooperation. In Australia, where four large banks have long dominated the market, the incumbents are steadily increasing their cooperation with fintechs in a bid to strengthen their digital offerings.
Australia’s Afterpay is making the jump from payments into banking as it seeks to develop new revenue streams amid intensifying competition in its core buy now, pay later (BNPL) business. Afterpay said on July 20 that it would launch its banking app, Afterpay Money, in October. The move into banking has a hint of irony to it, coming on the heels of the recent entry of several incumbent banking giants - such as Citibank and Commonwealth Wealth Bank of Australia – into Australia’s BNPL segment. Afterpay is the only BNPL firm besides Klarna to segue into banking.
Big Tech may have reached an apex in the United States and China, but in South Korea it is ascendant. In a country where chaebols have long been dominant, it is not hard to imagine internet companies – and indeed fintechs in particular – taking a similar path. And that is exactly what is happening. First, Kakao became a fintech giant, and now it is Viva Republica’s turn. The company, which operates Toss, the largest fintech app in South Korea, recently raised US$410 million at a valuation of US$7.4 billion.
Sea Group is one of the most successful loss-making companies in the world outside of private markets. Sea lost an astronomical amount of money in the first quarter of the year: US$422 million. That is not normally cause for celebration among listed companies, but its revenue also grew 147% year-on-year to US$1.76 billion. Investors are cheering: Sea’s stock price has risen more than 300% to US$283 over roughly the past year. Helping to drive that bullish investor sentiment are expectations about Sea’s potential in Southeast Asia’s nascent but fast-growing digital finance space.
If there ever was a “We are all fintechs now” moment, it must have been earlier this year when Indonesia’s online travel unicorn Traveloka stepped up its rebranding as a digital financial services provider. Skeptics could have been forgiven for rolling their eyes. Yes, the pandemic has hit the travel industry hard and companies like Traveloka need to rejig themselves or they may not survive. On the other hand, not every platform company is suited to reinvent itself as a fintech.