Latest Reports

  • Adapting for Uncertainty - a research brief from Kapronasia and Equinix
    Adapting for Uncertainty - a research brief from Kapronasia and Equinix The recent pandemic has been an extreme example of financial institutions (FIs) finding themselves blindsided by disruptive events. But meeting unexpected demands is a constant across all aspects of an FI’s business. Customer priorities can also shift according to economic and environmental circumstances, necessitating FIs to respond by providing customers…
  • Ecosystems for Success - a report from Kapronasia sponsored by ASX
    Ecosystems for Success - a report from Kapronasia sponsored by ASX The advent of electronic trading in the 1980s in the United States introduced a new era of algorithmic or high frequency trading (HFT) whereby firms tried to get their trading applications as close as possible to an exchange’s matching engine to lower latency and speed up trade execution. By the…
  • State of Regtech in APAC - a report from Kapronasia and Enterprise Ireland
    State of Regtech in APAC - a report from Kapronasia and Enterprise Ireland Asia, with its gleaming skyscrapers dotting some of the world's major financial centers and home to more than half the world's population, is at an inflection point. Facing spiralling compliance costs and a dynamic regulatory environment, financial institutions have turned to regulatory technology (regtech) to help acheive compliance while minimising…

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Latest Insight

PayPal is unlikely to become a super app in Asia

Written by Kapronasia || March 03 2021

PayPal is a payments giant with super app ambitions but a small footprint in Asia. Indeed, although PayPal has been present in many Asian markets for ages, it is not a market leader in any of them. In fact, to date, it is more notable for reducing its presence - exiting the domestic payments business in both Taiwan and India, for instance - than scaling up. Becoming a bigger player in Asia will not be easy for the US$340 billion company, despite its vast resources.

Afterpay aims to eschew regulatory pitfalls

Written by Kapronasia || February 25 2021

Afterpay is the world's foremost buy now, pay later rising star. The Australian company has been on an unmatched hot streak, its share price surging by about 300% in 2020. At roughly AU$134, Afterpay is trading 27 times its price-to-earnings ratio. In the six months to December 31, Afterpay's overall income rose 89% to AU$420 million, even as losses reached AU$76.5 million. Merchant growth in North America was 141%. The company's active users rose 80% year-on-year to 13.1 million. It seems that nothing can slow the company's ascent, with the possible exception of tighter regulation.

Digibanking key to Gojek-Tokopedia deal

Written by Kapronasia || February 24 2021

Gojek and Tokopedia are Indonesia's two most valuable startups and preeminent tech firms. Merging the two unicorns, with their mostly complementary services, makes a lot more sense that combining Gojek with its arch-rival Grab. While Grab-Gojek talks dragged on for months, Gojek and Tokopedia will not waste any time. They do not want to fall farther behind high-flying Sea Group, which is outperforming the Indonesian companies on their home turf.

Will AirAsia's super app gambit take flight?

Written by Kapronasia || February 22 2021

Once upon a time, super apps began as e-commerce platforms or free messaging services. They tapped the network effect to build giant user bases. Because their overhead was low, they could afford to be patient about monetization. Transportation companies do not have the same luxury, especially airlines reeling from the pandemic's effect on air travel. Yet Malaysia-based AirAsia is doubling down on its super app strategy first announced last year. In March, AirAsia will expand its food delivery service airasia food from Malaysia to Singapore.

Asia's super apps will aim to cash in on fintech in 2021

Written by Kapronasia || February 18 2021

Since the advent of the internet, technology startups have disrupted one industry after another. It was only a matter of time before they set their sights on financial services.

As it turns out, banking is harder to disrupt than retail, transportation, entertainment or almost anything else. The reason is simple: Trust is paramount in banking and takes time to build, while most digital banks have yet to develop compelling value propositions.

A few of Asia's platform companies have defied this conventional wisdom. The most notable is WeChat, the Tencent-owned app that bundles messaging, digibanking, e-commerce and entertainment under the same umbrella. WeChat was not the first platform company to thrive as a fintech - Alipay was - but it was the first to harness messaging's network effect for that purpose.

SWIFT faces growing number of challengers in Asia

Written by Kapronasia || February 11 2021

It seems that almost every plucky fintech in the cross-border payments space seeks to challenge SWIFT these days. Airwallex is perhaps the best known. The Hong Kong-headquartered (but Australia-founded) unicorn boldly proclaims that it wants to rejig global payments rails at SWIFT's expense. Then there is Lightnet, which is only slightly less ambitious. Lightnet aims to dominate B2B remittances in Asia with none other than cryptocurrency, which it says will render obsolete traditional global payments methods like SWIFT and Western Union. Lightnet is focused on making cross-border payments more economical by trimming the number of intermediary parties from about five to just the sender and receiver. The company expects costs to be further trimmed as its network grows.

Can P2P lending thrive in Indonesia?

Written by Kapronasia || February 10 2021

P2P lending is one of the fastest growing fintech segments in Indonesia. Demand for credit in Southeast Asia's largest economy is strong while its availability to most Indonesians through the traditional banking system is limited. Indonesia has tens of millions of people who are either underbanked or unbanked. Either way, they cannot easily get a bank loan. P2P platforms offer a convenient alternative. As of October 2020, Indonesia's online lenders had disbursed Rp 56.16 trillion in new loans, up 24% year-on-year, while the NPL ratio was 7.58%, according to data compiled by the country's Financial Services Authority. 

Hong Kong's virtual banks have their work cut out for them

Written by Kapronasia || February 09 2021

Two years ago, Hong Kong made fintech history in Asia as the region's first major economy to greenlight digital banks. As of the end of 2020, all eight of the banks were finally live. Political and covid-related disruptions had delayed their launch. Judging by the digibanks' marketing literature, they are poised to redefine banking in Hong Kong as we know it. The reality is more nuanced.

Where is the exit ramp for Grab?

Written by Kapronasia || February 04 2021

The clock is ticking for a Grab exit. Southeast Asia's most valuable startup has been in business now for almost nine years. It has been losing money that entire time. To be sure, Grab has seen its user base, valuation and revenue grow exponentially over that time. The company has evolved from an Uber lookalike into an aspiring super app betting on digibanking to deliver it from the red ink into the black. That could be easier said than done.

Fintech firms face an uncertain future in China

Written by Kapronasia || February 03 2021

Fintech crackdowns in China tend to snowball. That was the lesson learned when Beijing began culling crypto and P2P lending firms. At first, it seemed those industry segments might survive if they could assuage regulators. It later became clear that the only way to satisfy regulators was to shut down or move into another line of business, as erstwhile P2P juggernaut Lufax did. China's fintech giants, once seemingly unassailable, now face their own day of reckoning with regulators. Ant Group and its counterparts are probably too big to fail. But they are not too big to be cut down to size.

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